Evening Wrap: ASX 200 tumbles as all sectors finish in the red, midweek bounce proves just a relief rally

In a nutshell:

• A sea of red for the ASX 200, with plenty of sectors down more than 2% and 179 constituents (89.5%) lower

• Tuesday and Wednesday's strength turned out to be just a relief rally. Today's selloff wiped out most of this week's gains in Tech, Telcos, Discretionary and Real Estate

• Lynas (-8.6%) agreed to buy Meteoric Resources (+47.0%) in a ~$968m all-scrip deal at a 68.4% premium.

Let's dive in

• Carnage, absolute carnage. The ASX 200 trended lower for most of the session and closed near worst levels, now down 1.1% year-to-date and at the lowest since 10-June

• Breadth was abysmal. 176 constituents (88%) finished lower, and only a handful of odd resource, software and industrial names trading higher

• Today's selloff puts the past few sessions in context. Tuesday's late-session reversal and Wednesday's post-CPI rally were mostly relief rallies, a sign of how much hawkishness was already priced in. The reversal was sparked by Bullock's comment that "the hope here is that this will be restrictive enough... to bring things down." But then bond yields reversed their declines late Wednesday, with the Aussie 3-year erasing a 7 bp drop to close fractionally higher. Overnight, the long end of the US curve (10s and 30s) kept up its vertical ascent. That was clearly, not the all-clear, and markets reversed hard today

• You know it's bad when Energy (-3.0%) is the worst-performing sector. For the past few months it has been the standout beneficiary of higher oil prices

• Leadership is nowhere to be found. The weakest sectors of late, Tech, Telcos, Discretionary and Real Estate, had a big green day yesterday and gave back most, if not all, of those gains today. Meanwhile, sectors that have started to roll over, like Financials, Industrials and Staples, are now testing three-to-four-month or year-to-date lows. With leadership this thin, breadth this weak and so many sectors looking ready to roll over, it's not a good look

• At least US futures are up, off the back of a blowout Micron result

A few stocks of interest today:

• Lynas (-8.6%) is acquiring Meteoric Resources (+47.0%) in an all-scrip scheme that values MEI at ~$968m, a 68.4% premium to its last close. The strategic logic stacks up as it'll lift Lynas' Measured and Indicated resources by ~79% and its Ore Reserves by ~26%. Once the Caldeira project is up and running, it adds ~3,862t of NdPr a year, roughly 53% of Lynas' FY26 output. MEI shareholders will own ~5.9% of the combined group, so it doesn't massively eat away at existing holders. The catch is that Lynas inherits the US$498m capex bill to build Caldeira. So yes, a bigger Lynas, but a costly one that'll eat a good chunk of its $1.2bn cash pile (and all the risks with building a project these days)

• Data#3 (+13.6%) upgraded its 1H27 guidance at noon and now expects PBT to rise more than 40%, about 20% above Macquarie ests. The caveat is that the upgrade relies on one-off large transactions and the timing of investment spend

• Codan (+2.5%) just can't stop rallying. The stock jumped 23.9% on Tuesday after guiding to 1H27 NPAT of at least $160m, up 125% year-on-year. It's now up a cool 137% year-to-date (I can hear Carl saying "CDA was on ChartWatch uptrends all year")

• Koala (+4.4%), yes, the mattress company, is breaking out to all-time highs. It listed on 31 March at $3.40 and spent most of May to August around $3.00. Then it surged on its FY26 result, with EBITDA up 139% to $27.9m and a net profit of $24.6m. That's not a bad growth story for a ~$400m market cap company with no debt, $71.2m in net cash and expansion underway in Japan and the US

• Australia's trade surplus narrowed to $495m in August vs. $2.0bn consensus and $1.35bn in the prior month

  • Exports up 3.7% to $47.4bn, led by non-monetary gold (up 20.2%) and coal

  • Imports up 5.8% to $46.9bn, with capital goods up 22.3% on computer (ADP) equipment, while consumption goods fell 7%

  • Iron ore fines unit values down 14.3% year-on-year, though volumes rose 6% in August

  • Diesel import unit values up 57% year-on-year and jet fuel up 61.5%, while diesel import volumes fell 11.7%

• Australian job vacancies down 0.9% to 325,000 in the three months to August, following a 2.2% fall in the prior quarter, and down 1.3% year-on-year