Evening Wrap: ASX 200 stronger on CBA, big banks, as gold and critical minerals stocks tumble

The S&P/ASX 200 closed 36.6 points higher, up 0.41%.

Live by the sword, die by the sword. Precious metals and many critical minerals stocks came tumbling back to earth today. It's moves like this that are a good reminder why we must understand the correlation of returns in our portfolio 🛡️.

Be sure to click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all the key economic data in tonight's Evening Wrap.

Also, I have detailed technical analysis on the S&P/ASX 200 in today's ChartWatch.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 36.6 points higher at 9,031.9, 0.76% from its session low and just 0.03% from its high. In the broader-based S&P/ASX 300 (XKO) advancers beat decliners by 159 to 115.

Fund flows: Back to banks... 🏦

A bit of a push back “the other way” today as Resources (XJR) (-1.2%) logged in many ways what is an inevitable pullback from recent strength, the main part of course due to substantially a weaker Gold Sub-Index (XGD) (-4.2%).

Gold, and indeed the broader precious metals sector, was lower today on a sharp reversal in commodity prices on Friday (full technical analysis).

As is usually the case with the Old Tin Pot, if money must flow out of Resources, it’s probably going to find a place elsewhere – and let’s face it, that usually means Financials (XFJ) (+1.5%) – today’s best performing major sector index. Commonwealth Bank of Australia. (CBA) (+2.6%) was the clear sector leader, well, in terms of index points it was.

Real Estate (XPJ) (+1.1%), which shares plenty of similarities with Financials in terms of being a bond market proxy, also got a bid today, and Information Technology (XIJ) (+0.9%) logged a rebound from recent weakness on stronger US tech’s on Friday night.

That’s it, really, a rather tame day with an overall favourable result at the index level. I note though, that consumer stocks continue to underperform (Consumer Discretionary (XDJ) (+0.1%) & Consumer Staples (XSJ) (+0.1%)).

Stock Specific: Precious metals take a beta... I mean breather!

"High beta".

It's well know that gold stocks are high beta plays. If you didn't know this, well, assuming you're holding gold stocks today – now you do.

"High beta" means "tends to go up more in the good times, and down more in the bad times". Today was the latter... Again – if you hadn't noticed!

It just means live by the sword, die by the sword, and the moves today are a good reminder why we must understand the correlation of returns in our portfolio. Another bit of jargon. Let me rephrase:

If you have 32 gold and silver stocks in your portfolio – that's not really diversification now, is it!? 🤔

And if the other 32 stocks are critical minerals stocks – because they mostly got belted (again) today... and they've been running hot roughly at the same time as precious metals (and likely due to the same hot money flooding in 🔥🔥🔥), that's also not great diversification practice!

But this is not a lecture, because as a trend follower, you're faced with a wall of thematic risk presenting itself each day. It's the hardest thing you will ever do: Try to balance making hay while the sun is shining against not tipping too far into the obscenely overexposed to one theme category! ⚖️

At the end of the day, it means taking a beating every now and then when the trend inevitably bends. The goal, as always, is to tally the pro-trend wins against the counter trend move losses – and come out ahead. That's all that matters – not any single trade outcome.

Today's best blue chip gainers

Today's worst blue chip losers

ChartWatch

S&P/ASX 200 (XJO)

S&P/ASX 200 chart (click here for full size image)

A solid result today – a demand-side candle of modest proportions, with a good portion of downward pointing shadow, and which closed smack-bang on its session high.

It means the session started with buy the dip activity, and then price was supported by steady demand-side control all the way through to the close.

MOTN (More Often Than Not) this kind of candle will be followed by another demand-side showing.

MOTN – not always!

But when we add in the fact the short term uptrend ribbon is growing in stature and is acting as a zone of dynamic demand, and the long term uptrend is impeccable and also a rock-solid zone of dynamic demand – than the “More Often” bit in MOTN bit tends to grow.

View: Very straightforward here – trends, price action (rising peaks and rising troughs), and candles (predominance of demand-side showings) all swing the balance of probability to further gains for the XJO. Therefore, I have no other option but to remain FRP (Full Risk Position = My personal allowable capital allocation limit for my investments in Australian stocks is 100%).

Key levels: 8843 is the closest key point of demand, the price should not close below here if the demand-side is in control of the XJO’s price. Ultimately though, 8731 remains the critical go-no-go zone for the XJO bull market = ⚠️.

Economy

Today

• China 1-year & 5-year Loan Prime Rate

  • No change at 3.0% and 3.5% respectively as forecast

• China September Qtr GDP & Various September "Data Dump"

  • GDP: +4.8% p.a. vs +4.7% p.a. forecast and +5.2% p.a. in June Qtr

  • Industrial Production: +6.5% p.a. vs 5.0% p.a. forecast and +5.2% p.a. in August

  • Retail Sales: +3.0% p.a. vs +3.4% in August

  • Fixed Asset Investment: -0.5% p.a. vs +0.1% p.a. forecast and +0.5% p.a. in August

  • Unemployment Rate: 5.2% vs 5.3% forecast and 5.3% in August

Later this week

Tuesday

• No major economic announcements scheduled for Tuesday

Wednesday

• No major economic announcements scheduled for Tuesday

Thursday

• No major economic announcements scheduled for Tuesday

Friday

• 01:00 USA September Existing Home Sales (4.06 million forecast 4.0 million in August)

• 11:05 AUS RBA Governor Michelle Bullock speaks

Saturday

• 00:45 USA October Flash Manufacturing & Services PMIs

  • Manufacturing: 51.9 forecast vs 52.0 in September

  • Services: 53.5 forecast vs 54.2 in September

Latest News

Interesting Movers

Trading higher

• +45.5% Australian Rare Earths (AR3) - No news, rise is consistent with prevailing short and long term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈.

• +33.7% Resolution Minerals (RML) - $2 Million Placement to Tribeca Investment Partners, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +24.5% Hastings Technology Metals (HAS) - No news, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +19.4% Lumos Diagnostics Holdings (LDX) - No news, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +18.5% Arafura Rare Earths (ARU) - No news, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +16.3% Locksley Resources (LKY) - Locksley Delivers 100% American Made Antimony Ingot, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +15.9% Shriro Holdings (SHM) - Share Buy-Back, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up 🔎📈

• +15.0% Cufe (CUF) - No news, rise is consistent with prevailing short and long term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

Trading lower

• -28.0% European Lithium (EUR) - Update to Replacement Options Offer, general weakness across the broader Critical Minerals sector today.

• -18.8% Deep Yellow (DYL) - Leadership Transition, general weakness across the broader Uranium sector today.

• -17.7% Bapcor (BAP) - Business update and FY26 guidance, fall is consistent with prevailing short and long term downtrends, one of the most Featured (highest conviction) stocks in ChartWatch ASX Scans Downtrends list 🔎📉

• -16.7% Bougainville Copper 1 Kina (BOC) - No news, general weakness across the broader Critical Minerals sector today.

• -15.2% Aura Energy (AEE) - Resignation of Managing Director, general weakness across the broader Uranium sector today.

• -14.3% Coronado Global Resources (CRN) - No news, repelled perfectly from long term downtrend ribbon! 🔎📉

• -13.7% Australian Strategic Materials (ASM) - ASM successfully raises A$55M to ramp-up alloy output, general weakness across the broader Critical Minerals sector today.

Broker Moves

Aussie Broadband (ABB)

• Retained at buy at Citi; Price Target: $6.15

Amplitude Energy (AEL)

• Retained at outperform at Macquarie; Price Target: $0.35

Australian Finance Group (AFG)

• Retained at outperform at Macquarie; Price Target: $2.96 from $2.86

Aristocrat Leisure (ALL)

• Retained at buy at Citi; Price Target: $71.00

AMP (AMP)

• Retained at overweight at Morgan Stanley; Price Target: $1.95

• Downgraded to accumulate from buy at Ord Minnett; Price Target: $2.05 from $1.95

ARB Corporation (ARB)

• Retained at accumulate at Morgans; Price Target: $42.60 from $44.50

ASX (ASX)

• Retained at sell at UBS; Price Target: $62.15

AUB Group (AUB)

• Retained at neutral at UBS; Price Target: $35.50

Adveritas (AV1)

• Retained at buy at Bell Potter; Price Target: $0.23 from $0.20

Bapcor (BAP)

• Retained at outperform at RBC Capital Markets; Price Target: $4.50

Bendigo and Adelaide Bank (BEN)

• Retained at neutral at UBS; Price Target: $13.00

Bellevue Gold (BGL)

• Retained at outperform at Macquarie; Price Target: $1.70

BHP Group (BHP)

• Retained at overweight at Morgan Stanley; Price Target: $48.00

Biome Australia (BIO)

• Retained at buy at Bell Potter; Price Target: $1.00 from $0.95

Benz Mining Corp (BNZ)

• Initiated at speculative buy at Canaccord Genuity; Price Target: $2.50

Boss Energy (BOE)

• Retained at underweight at Morgan Stanley; Price Target: $1.85

Beach Energy (BPT)

• Retained at sector perform at RBC Capital Markets; Price Target: $1.20

Challenger (CGF)

• Retained at buy at Bell Potter; Price Target: $10.25 from $9.50

Capricorn Metals (CMM)

• Retained at underperform at Macquarie; Price Target: $13.00

COG Financial Services (COG)

• Retained at accumulate at Morgans; Price Target: $2.63 from $2.14

Cochlear (COH)

• Retained at underweight at Morgan Stanley; Price Target: $280.00

Cygnus Metals (CY5)

• Retained at speculative buy at Canaccord Genuity; Price Target: $0.35 from $0.30

DPM Metals Inc. (DPM)

• Retained at outperform at Macquarie; Price Target: $47.00

Deterra Royalties (DRR)

• Retained at equal-weight at Morgan Stanley; Price Target: $4.35

Evolution Mining (EVN)

• Retained at underperform at Macquarie; Price Target: $9.50

Fortescue (FMG)

• Retained at overweight at Morgan Stanley; Price Target: $21.20

Greatland Resources (GGP)

• Retained at outperform at Macquarie; Price Target: $10.50

Golden Horse Minerals (GHM)

• Initiated at speculative buy at Canaccord Genuity; Price Target: $1.50

Genesis Minerals (GMD)

• Retained at outperform at Macquarie; Price Target: $8.00

GQG Partners Inc. (GQG)

• Retained at buy at UBS; Price Target: $2.30 from $2.25

Guzman Y Gomez (GYG)

• Retained at neutral at UBS; Price Target: $26.50

HUB24 (HUB)

• Retained at neutral at Citi; Price Target: $109.00

• Retained at overweight at Morgan Stanley; Price Target: $115.00

• Retained at neutral at UBS; Price Target: $112.00

Insurance Australia Group (IAG)

• Retained at buy at UBS; Price Target: $9.65

Infratil (IFT)

• Retained at buy at Citi; Price Target: $14.10

IGO (IGO)

• Retained at underweight at Morgan Stanley; Price Target: $4.60

Iluka Resources (ILU)

• Retained at overweight at Barrenjoey; Price Target: $7.60

• Retained at hold at Canaccord Genuity; Price Target: $7.10 from $6.65

• Retained at neutral at Macquarie; Price Target: $7.10

• Retained at overweight at Morgan Stanley; Price Target: $8.60

• Retained at sell at Ord Minnett; Price Target: $6.00

Judo Capital Holdings (JDO)

• Retained at buy at UBS; Price Target: $2.20

L1 Group (L1G)

• Retained at neutral at UBS; Price Target: $0.79

Light & Wonder Inc. (LNW)

• Retained at buy at Citi; Price Target: $176.00

Lovisa Holdings (LOV)

• Retained at neutral at UBS; Price Target: $42.00

Lynas Rare Earths (LYC)

• Retained at equal-weight at Morgan Stanley; Price Target: $19.45

Magellan Financial Group (MFG)

• Retained at underweight at Morgan Stanley; Price Target: $7.85

Mineral Resources (MIN)

• Retained at overweight at Morgan Stanley; Price Target: $49.00

Medibank Private (MPL)

• Retained at neutral at UBS; Price Target: $5.25

Macquarie Group (MQG)

• Retained at neutral at Citi; Price Target: $200.00

• Retained at equal-weight at Morgan Stanley; Price Target: $226.00

• Retained at neutral at UBS; Price Target: $225.00

National Australia Bank (NAB)

• Retained at neutral at UBS; Price Target: $37.50

Newmont Corporation (NEM)

• Retained at neutral at Macquarie; Price Target: $153.00

Northern Star Resources (NST)

• Retained at outperform at Macquarie; Price Target: $30.00

Netwealth Group (NWL)

• Retained at buy at Citi; Price Target: $35.00

• Retained at overweight at Morgan Stanley; Price Target: $41.50

• Retained at neutral at UBS; Price Target: $33.50

Paladin Energy (PDN)

• Retained at overweight at Morgan Stanley; Price Target: $10.40

Pilbara Minerals (PLS)

• Retained at overweight at Morgan Stanley; Price Target: $2.85

Perpetual (PPT)

• Retained at equal-weight at Morgan Stanley; Price Target: $21.60

Perseus Mining (PRU)

• Retained at neutral at Macquarie; Price Target: $5.50

PEXA Group (PXA)

• Retained at buy at UBS; Price Target: $17.45

Qantas Airways (QAN)

• Retained at buy at Citi; Price Target: $13.60

• Upgraded to buy from overweight at Jarden; Price Target: $12.90

QBE Insurance Group (QBE)

• Retained at outperform at CLSA; Price Target: $21.90 from $25.00

• Retained at buy at UBS; Price Target: $24.70

Ramsay Health Care (RHC)

• Retained at neutral at Citi; Price Target: $33.00 from $36.00

Ramelius Resources (RMS)

• Retained at neutral at Macquarie; Price Target: $4.20

Resolute Mining (RSG)

• Retained at neutral at Macquarie; Price Target: $1.25

South32 (S32)

• Retained at overweight at Morgan Stanley; Price Target: $3.25

Sandfire Resources (SFR)

• Retained at underweight at Morgan Stanley; Price Target: $11.45

Superloop (SLC)

• Retained at buy at Citi; Price Target: $3.75

Stepchange Holdings (STH)

• Initiated at buy at Ord Minnett; Price Target: $0.23

Santos (STO)

• Downgraded to accumulate from buy at Ord Minnett; Price Target: $8.10 from $8.35

Suncorp Group (SUN)

• Downgraded to hold from outperform at CLSA; Price Target: $19.95 from $22.00

• Retained at buy at UBS; Price Target: $23.15

Turaco Gold (TCG)

• Retained at outperform at Macquarie; Price Target: $0.80

The Lottery Corporation (TLC)

• Retained at neutral at E&P; Price Target: $5.53 from $5.44

Telix Pharmaceuticals (TLX)

• Retained at neutral at Citi; Price Target: $34.00

Torque Metals (TOR)

• Initiated at speculative buy at Canaccord Genuity; Price Target: $0.45

Universal Store Holdings (UNI)

• Retained at buy at UBS; Price Target: $10.50

Vault Minerals (VAU)

• Retained at outperform at Macquarie; Price Target: $1.00 from $0.73

Virgin Australia Holdings (VGN)

• Retained at neutral at Citi; Price Target: $3.80

• Initiated at overweight at Jarden; Price Target: $3.90

West African Resources (WAF)

• Retained at underperform at Macquarie; Price Target: $3.00

Westpac Banking Corporation (WBC)

• Downgraded to sell from trim at Morgans; Price Target: $30.77 from $30.95

• Downgraded to sell from lighten at Ord Minnett; Price Target: $30.00

• Retained at neutral at UBS; Price Target: $38.00

Westgold Resources (WGX)

• Retained at outperform at Macquarie; Price Target: $7.40

Whitehaven Coal (WHC)

• Retained at overweight at Morgan Stanley; Price Target: $8.00

Zip Co (ZIP)

• Retained at buy at Citi; Price Target: $4.50

• Retained at outperform at RBC Capital Markets; Price Target: $5.00

• Retained at buy at UBS; Price Target: $5.25

Scans