Evening Wrap: ASX 200 surges 100 points on switch into resources stocks, as uranium, gold and lithium stocks soar

The S&P/ASX 200 closed 100.2 points higher, up 1.13%.

Uranium and lithium stocks have been all over the place recently, pretty much all down yesterday (yet the day before up), and pretty much all up today. Uranium’s an easy one to explain, given the uranium price was 1.2% higher on COMEX overnight...

But lithium stocks staged the most miraculous recovery from yesterday's slump – a slump of course triggered by news that China's biggest producer would likely restart production sooner than expected. What gives? Lithium markets are closed for Chinese holidays... We have the answer!

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 100.2 points higher at 8,945.9, 1.1% from its session low and just 0.2% from its high. In the broader-based S&P/ASX 300 (XKO) advancers beat decliners by a strong but hardly unanimous 216 to 64.

Fund flows – All aboard the resources train 🚂

There is a definite shift towards Resources (XJR) (+1.8%) underway, and that includes Gold (XGD) (+3.0%). But unlike the usual ebb and flow of the Aussie market, it doesn’t appear to be at the great expense of the usual funding sectors like Financials (XFJ) (+1.2%), Healthcare (XHJ) (+2.0%), and Real Estate (XPJ) (+1.2%) – they all still did pretty well today. But I do note, other defensive areas of the market like Consumer Staples (XSJ) (-0.1%) and Utilities (XUJ) (-0.20%) lagged, and perhaps it’s notable that “high P/E” sectors like Consumer Discretionary (XDJ) (+0.5%) and Information Technology (XIJ) (+0.0%) were also near the bottom of the sector performance list.

Resources are “cyclical”, so think of them as “offence”, and they’re typically also “low P/E” at this stage of the cycle. Consider that “high P/E” has dominated for 3-years now, arguably largely at cyclicals’ expense. If we are at the start of a proper cyclicals move (read this article to understand why it might be starting now) – then we could see some of today’s themes continue over the months to come.

Stock specifics – Uranium and lithium rebound

Uranium and lithium stocks have been all over the place recently, pretty much all down yesterday (yet the day before that up), and pretty much all up today. Uranium’s an easy one to explain, given the uranium price was 1.2% higher on COMEX overnight, it’s in a general uptrend – and uranium stocks are generally trending higher too...

Lithium, that’s a trickier one…🤔 Particularly given that they were generally dumped yesterday on news that China’s largest producer and consumer of lithium minerals CATL, is likely to restart mining operations at its Jianxiawo lithium mine in Yichun sooner rather than later.

That was all based on speculative media reports, though, so possibly there are rumours in the market I haven’t seen evidence of that CATL’s permitting is going the other way... Even more intriguing is the fact that major lithium minerals markets are closed for Chinese holidays... So, no help there!

What gives? One thing I did notice today, was that major Chinese lithium stocks went berserk in Hong Kong – with Tianqi Lithium Corp up 12% and Gangfeng Lithium Group up 8.7%. The result was that local lithium stocks followed suit – in some cases recouping yesterday's losses.

There are two super interesting charts in Tianqi and Gangfeng that are worth checking out. See Ganfeng's below. They definitely would have been regulars in ChartWatch ASX Scans over last few months if they were in the universe… Hmmm... ChartWatch HKE Scans anyone? 🤔

Gangfeng Lithium Group

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)

Back to the Golden Le Creuset! 💪🥳

Was there every any doubt?

I’ll admit after “that candle” on 3-Sep, I had a few.

But, as hard as the supply-side tried, they couldn't break the low of that candle – which held firm through the entire September consolidation phase. Clearly, there was enough demand to soak up the customary September Swoon supply.

But September’s history baby! And now begins what's typically a very strong period of the year for Aussie stocks in seasonal terms: October is typically modestly positive, with November and December the “big shows”.

All Ordinaries Total Return XAOA Monthly Gain Reliability 30 years

Seasonality is a guide. Price action is reality, and it’s the price action that will form our decision making process. On this point, I’d argue it has turned decidedly positive as of today’s candle. Can I even go so far as to call today's candle our new “that candle”? I.e., the candle that likely defines the price action for the next month… or however long…

It certainly is emphatic – it’s big, it’s white, and it closed near its high. This suggests to me that the demand-side is back in control of the XJO’s short term price (to realign with control of the long term price which was never in question as per the long term uptrend ribbon). It also suggests that the demand-side was taking out supply into the close – usually a good indication there are further gains to come.

Another tick, is the consumption of that super, super pesky 8880-93 supply zone. Good riddance to that! ✅

Now we look to 8991-9055. I’d be surprised if we didn’t see at least some supply-side response in there – after-all it does include an all-time high – and those can be notoriously tricky to crack.

But, with a close above 8880-93 and also back above the short term trend ribbon, a resumption of rising peaks and rising troughs in the price action, and I put to you a return to a predominance of demand-side candles = I’m happy to revert to FRP 💯. (Full Risk Position = My personal allowable capital allocation limit for my investments in US stocks is 100%)

Key levels: 8731 is the most important near-term point of demand, the price should not close below here if the demand-side is in control of the XJO’s price = ⚠️

Economy

Today

• AUS August Household Spending

  • +0.1% m/m actual vs +0.3% m/m forecast and +0.4% m/m revised down from +0.5% m/m in July

  • Down sharply and below expectations.

  • Broader trend is up, but has weakened since May.

  • Comment: According to AMP Economics, "5% growth in nominal spending reflects price gains & population growth so the volume per capita spending growth is only around 0.4% over the year." I.e., Aussie consumers have grown very conservative with their spending as cost of living pressures bite – three rate cuts since Feb will likely help loosen the purse strings over the next few months.

AUS August Household Spending. Source: Australian Bureau of Statistics

Later this week

Friday

• ALL DAY CHN Bank Holiday

• 22:30 USA September Non-farm Payrolls

  • Non-Farm Employment Change: +52,000 forecast vs +22,000 in August

  • Average Hourly Earnings: +0.3% m/m forecast vs +0.3% m/m in August

  • Unemployment Rate: +4.3% forecast vs +4.3% in August

Saturday

• 00:00 USA September ISM Services PMI (51.8 forecast vs 52.0 in August)

Latest News

Interesting Movers

Trading higher

• +45.7% Race Oncology (RAC) – Discovery of the Anticancer Mechanism of (EE)-bisantrene, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +33.9% Focus Minerals (FML) – No news, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +30.5% James Bay Minerals (JBY) – Investor Presentation, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long term uptrends 🔎📈

• +29.0% Peninsula Energy (PEN) – No news, general strength across the broader Uranium sector today.

• +25.4% Carnaby Resources (CNB) – No news, general strength across the broader Precious Metals sector today.

• +22.2% Starpharma (SPL) – Continued positive response to 30-Sep Research and Option Agreement with Radiopharm Theranostics, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +21.0% Lakes Blue Energy (LKO) – Wombat-5 Well, Gippsland Basin, Drilling Summary.

• +16.8% St Barbara (SBM) – No news since 01-Oct Update on Strategic Options for Atlantic and Simberi, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +16.4% Gateway Mining (GML) – No news, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +14.0% Rox Resources (RXL) – No news, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +13.9% Horizon Minerals (HRZ) – No news, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +12.0% Bravura Solutions (BVS) – Continued positive response to 01-Oct Guidance Update, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +12.0% Clarity Pharmaceuticals (CU6) – Data on SAR-bisFAP to be presented at WMIC 2025, rise is consistent with prevailing short term uptrend and long term trend is transitioning from down to up 🔎📈

• +11.8% Kairos Minerals (KAI) – No news, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long term uptrends, a regular in ChartWatch ASX Scans Uptrends list 🔎📈

• +11.2% Ballard Mining (BM1) – Mt Ida Fully Permitted, general strength across the broader Precious Metals sector today, rise is consistent with prevailing short and long term uptrends, a recent regular in ChartWatch ASX Scans Uptrends list 🔎📈

Trading lower

• -13.3% Electro Optic Systems (EOS) – No news, pulled back in the wake of recent sharp rally.

• -11.2% Nova Minerals (NVA) – Ceasing to be a substantial holder (Neban Gold Fund), pulled back in the wake of recent sharp rally.

• -9.8% Droneshield (DRO) – No news, pulled back in the wake of recent sharp rally.

• -9.4% Saturn Metals (STN) – Exceptional Support for Upsized $45M Capital Raising, pulled back in the wake of recent sharp rally.

• -9.0% Boab Metals (BML) – No news, pulled back in the wake of recent sharp rally.

Broker Moves

29Metals (29M)

• Downgraded to neutral from outperform at Macquarie; Price Target: $0.50 from $0.40

Atlantic Lithium (A11)

• Retained at neutral at Macquarie; Price Target: $0.23 from $0.16

AGL Energy (AGL)

• Retained at buy at Citi; Price Target: $11.50

Aeris Resources (AIS)

• Downgraded to neutral from outperform at Macquarie; Price Target: $0.50 from $0.28

Aristocrat Leisure (ALL)

• Retained at accumulate at Morgans; Price Target: $77.00 from $71.00

Aurelia Metals (AMI)

• Retained at outperform at Macquarie; Price Target: $0.30 from $0.27

AMP (AMP)

• Retained at neutral at Macquarie; Price Target: $1.72 from $1.70

Eagers Automotive (APE)

• Retained at overweight at Morgan Stanley; Price Target: $32.00 from $28.00

Bellevue Gold (BGL)

• Retained at outperform at Macquarie; Price Target: $1.35 from $1.20

BHP Group (BHP)

• Retained at neutral at Macquarie; Price Target: $42.00 from $43.00

Beach Energy (BPT)

• Retained at underperform at Macquarie; Price Target: $0.90 from $0.92

Bravura Solutions (BVS)

• Retained at neutral at Macquarie; Price Target: $3.02 from $2.03

• Retained at buy at Shaw and Partners; Price Target: $3.40 from $2.90

Commonwealth Bank of Australia (CBA)

• Retained at underweight at Morgan Stanley; Price Target: $143.70

Cuscal (CCL)

• Retained at buy at Bell Potter; Price Target: $4.60 from $4.50

Champion Iron (CIA)

• Retained at neutral at Macquarie; Price Target: $5.00

Capricorn Metals (CMM)

• Downgraded to underperform from neutral at Macquarie; Price Target: $11.00 from $10.00

Carnaby Resources (CNB)

• Retained at outperform at Macquarie; Price Target: $0.75 from $0.70

Coles Group (COL)

• Retained at overweight at Morgan Stanley; Price Target: $26.80

Computershare (CPU)

• Retained at neutral at Macquarie; Price Target: $36.00 from $37.50

Coronado Global Resources Inc (CRN)

• Retained at underperform at Macquarie; Price Target: $0.24 from $0.18

Capstone Copper Corp. (CSC)

• Retained at outperform at Macquarie; Price Target: $13.70 from $12.50

CSL (CSL)

• Retained at overweight at Morgan Stanley; Price Target: $285.00

Dyno Nobel (DNL)

• Retained at neutral at Citi; Price Target: $3.50 from $2.55

• Retained at hold at Morgans; Price Target: $3.16 from $2.82

DPM Metals Inc. (DPM)

• Initiated at outperform at Macquarie; Price Target: $41.00

DroneShield (DRO)

• Retained at buy at Shaw and Partners; Price Target: $3.60

Deterra Royalties (DRR)

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

Elevra Lithium (ELV)

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

Evolution Mining (EVN)

• Retained at underperform at Macquarie; Price Target: $7.60 from $7.00

FireFly Metals (FFM)

• Retained at outperform at Macquarie; Price Target: $1.60

Flight Centre Travel Group (FLT)

• Retained at buy at Citi; Price Target: $15.10

Fortescue (FMG)

• Retained at underperform at Macquarie; Price Target: $16.50 from $15.50

Generation Development Group (GDG)

• Retained at overweight at Morgan Stanley; Price Target: $7.50

Greatland Resources (GGP)

• Retained at outperform at Macquarie; Price Target: $8.20 from $7.10

Global Lithium Resources (GL1)

• Upgraded to neutral from underperform at Macquarie; Price Target: $0.35 from $0.13

Genesis Minerals (GMD)

• Retained at outperform at Macquarie; Price Target: $6.50 from $5.50

GQG Partners Inc. (GQG)

• Retained at outperform at Macquarie; Price Target: $2.55 from $2.63

GWA Group (GWA)

• Retained at outperform at Macquarie; Price Target: $3.05

IGO (IGO)

• Retained at outperform at Macquarie; Price Target: $5.75 from $5.50

Iluka Resources (ILU)

• Retained at neutral at Macquarie; Price Target: $6.60 from $5.80

Image Resources NL (IMA)

• Retained at outperform at Macquarie; Price Target: $0.14

IPH (IPH)

• Retained at outperform at Macquarie; Price Target: $5.55

James Hardie Industries Plc (JHX)

• Retained at outperform at Macquarie; Price Target: $37.20

• Retained at overweight at Morgan Stanley; Price Target: $39.00

Jupiter Mines . (JMS)

• Retained at outperform at Macquarie; Price Target: $0.27 from $0.25

Karoon Energy (KAR)

• Retained at neutral at Macquarie; Price Target: $1.75 from $1.90

Light & Wonder Inc. (LNW)

• Retained at buy at Morgans; Price Target: $175.00

Lotus Resources (LOT)

• Retained at speculative buy at Canaccord Genuity; Price Target: $0.31

Liontown Resources (LTR)

• Retained at underperform at Macquarie; Price Target: $0.65

Lynas Rare Earths (LYC)

• Retained at neutral at Macquarie; Price Target: $16.50 from $14.50

Meteoric Resources NL (MEI)

• Retained at outperform at Macquarie; Price Target: $0.34

Magellan Financial Group (MFG)

• Retained at underperform at Macquarie; Price Target: $8.55 from $8.65

Mineral Resources (MIN)

• Retained at buy at Bell Potter; Price Target: $49.00 from $29.50

• Retained at underperform at Macquarie; Price Target: $35.00 from $30.00

Macquarie Group (MQG)

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

National Australia Bank (NAB)

• Retained at overweight at Morgan Stanley; Price Target: $42.50

Newmont Corporation (NEM)

• Retained at neutral at Macquarie; Price Target: $130.00 from $111.00

New Hope Corporation (NHC)

• Retained at underperform at Macquarie; Price Target: $3.80

Nickel Industries (NIC)

• Upgraded to outperform from neutral at Macquarie; Price Target: $0.80 from $0.73

Northern Star Resources (NST)

• Retained at outperform at Macquarie; Price Target: $27.00 from $24.00

Ora Banda Mining (OBM)

• Retained at underperform at Macquarie; Price Target: $1.10 from $0.95

Origin Energy (ORG)

• Retained at buy at Citi; Price Target: $13.00

Pilbara Minerals (PLS)

• Retained at outperform at Macquarie; Price Target: $2.75 from $2.30

Pioneer Credit (PNC)

• Retained at buy at Shaw and Partners; Price Target: $0.80

Perpetual (PPT)

• Upgraded to outperform from neutral at Macquarie; Price Target: $23.95 from $22.85

Perseus Mining (PRU)

• Downgraded to neutral from outperform at Macquarie; Price Target: $4.70 from $4.10

Qoria (QOR)

• Initiated at buy at Bell Potter; Price Target: $0.90

QPM Energy (QPM)

• Retained at speculative buy at Ord Minnett; Price Target: $0.13

Qube Holdings (QUB)

• Upgraded to buy from accumulate at Ord Minnett; Price Target: $4.52

Reece (REH)

• Retained at underperform at Macquarie; Price Target: $10.10

Ramsay Health Care (RHC)

• Downgraded to underweight from equal-weight at Morgan Stanley; Price Target: $31.30 from $36.70

Rio Tinto (RIO)

• Retained at neutral at Macquarie; Price Target: $115.00 from $111.00

Ramelius Resources (RMS)

• Downgraded to neutral from outperform at Macquarie; Price Target: $3.70 from $3.30

Regis Resources (RRL)

• Downgraded to underperform from neutral at Macquarie; Price Target: $5.20 from $4.40

Resolute Mining (RSG)

• Retained at neutral at Macquarie; Price Target: $1.00 from $0.75

Reliance Worldwide Corporation (RWC)

• Retained at outperform at Macquarie; Price Target: $5.30

South32 (S32)

• Retained at neutral at Macquarie; Price Target: $2.80 from $2.70

Sandfire Resources (SFR)

• Retained at neutral at Macquarie; Price Target: $13.50 from $12.50

SGH (SGH)

• Retained at outperform at Macquarie; Price Target: $53.20

Syntara (SNT)

• Retained at speculative buy at Bell Potter; Price Target: $0.06

Santos (STO)

• Retained at outperform at Macquarie; Price Target: $8.25 from $8.45

Suncorp Group (SUN)

• Retained at overweight at Morgan Stanley; Price Target: $25.00

Sovereign Metals (SVM)

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

Tamboran Resources Corporation (TBN)

• Retained at buy at Citi; Price Target: $35.00 from $29.00

Turaco Gold (TCG)

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

The Lottery Corporation (TLC)

• Retained at sell at Citi; Price Target: $5.00

TPG Telecom (TPG)

• Upgraded to accumulate from hold at Morgans; Price Target: $5.50

Vault Minerals (VAU)

• Retained at outperform at Macquarie; Price Target: $0.75 from $0.65

West African Resources (WAF)

• Downgraded to underperform from outperform at Macquarie; Price Target: $3.00 from $3.40

Westpac Banking Corporation (WBC)

• Retained at underweight at Morgan Stanley; Price Target: $31.60

Woodside Energy Group (WDS)

• Retained at neutral at Macquarie; Price Target: $24.00 from $25.00

• Retained at equal-weight at Morgan Stanley; Price Target: $27.00

Wesfarmers (WES)

• Retained at equal-weight at Morgan Stanley; Price Target: $93.50

Westgold Resources (WGX)

• Retained at outperform at Macquarie; Price Target: $5.60

Whitehaven Coal (WHC)

• Retained at neutral at Macquarie; Price Target: $7.25 from $6.25

Scans