Evening Wrap: ASX falls, Woodside fades early gains, Core Lithium slumps on $48m block trade

The S&P/ASX 200 closed 34 points lower, down -0.53%.

The local sharemarket started strong but gains fizzled as the day dragged on. Australian retail sales were better-than-expected, Core Lithium's major shareholders reportedly dumped $48m worth of shares, energy stocks reversed a massive rally and China might not be able to unleash as much stimulus as it wants.

Let's dive in.

ASX 200, All Ords and All Tech intraday overview

Markets

A strong +0.31% start for the ASX 200 turned into another depressing close, towards session lows. Defensive sectors managed to weather the storm, while most others sectors finished in red.

• 2 out of 11 sectors advanced

• Utilities and Telecommunications rose more than 1.4%

• Energy, Industrials and Staples were also relative outperformers (but still red)

• Financials, Discretionary and Tech underperformed benchmarks

• 55% of the Top 200 companies declined

Announcements

• Mayne Pharma (ASX: MYX) +3.9% appointed Mr Shawn Patrick O’Brien as CEO. Mr O’Brien was previously the CEO of Genomind and has over 35 years of global pharmaceutical industry experience  

• Piedmont Lithium (ASX: PLL) +3.6% and its partner Atlantic Lithium completed a prefeasibility study for the Ghana Project

• AMA Group (ASX: AMA) -2.04% entered into a sale agreement to sell its FluidDrive business for $2.45m

• Nickel Industries (ASX: NIC) -3.75% acquired an additional 40% interest in the Oracle Nickel Project for US$212m, increasing its equity interest to 70%

  • Oracle is scheduled to commence commissioning in October and has a nameplate capacity of 36,000 tonnes of nickel per annum

• Dreadnought Resources (ASX: DRE) -4.8% commenced RC drilling at the Mangaron Rare Earths Project in Western Australia  

• Telix Pharma (ASX: TLX) -15.4% withdrew its marketing authorisation application for its Illuccix prostate cancer imaging product in Europe

Some interesting lithium stock movements:

• Greenwing Resources (ASX: GW1) +13.9% shares continued to rally after Chinese EV maker Nio agreed to pay $12m at 55 cents per share, a 124% premium to its pre-announcement close on Monday

• Core Lithium (ASX: CXO) -7.6% shares sold off after a $48m block trade worth 2.7% was noted by the AFR

  • "Fingers pointed at Core Lithium’s substantial shareholders, Gangfeng and Yahua, as the likely sellers."

Quick bites 

• US Treasury 10-year yields rise above 4% of the first time since 2010 (Bloomberg)

• Apple ditches iPhone production increase after demand falters (Bloomberg)

• Yuan at 2008 low fuels speculation that Chinese monetary easing will slow (Bloomberg)

Economy

• Australian retail sales rose 0.6% month-on-month in August from 1.3% in July

  • Consensus expected a rose of 0.4%

  • “This month’s rise was driven by the combined increase in food related industries, with cafes, restaurants and takeaway food services up 1.3 per cent and food retailing up 1.1 per cent,” said Ben Dorber, Head of Retail Statistics at the ABS

  • “While households continue to spend, non-food industry results were mixed and only contributed a small amount to the total rise in retail turnover.”

Commodities

Most commodity prices eased slightly after a small relief rally on Tuesday. Notable movers:

• Iron ore futures on China’s Dalian Commodity Exchange fell -0.4%

• Brent crude oil fell -0.9% to US$84.9 a barrel

Latest news

Scans

Post market charts

Another day, another messy market. The ASX 200 was up 0.3% in early trade, offering some hope that it'll defend these June lows. A coffee, some chit chat and a lunch break later, its down north of -0.5%.

Still, the ASX 200 hasn't undercut June lows but its dangerously close. Similar to what I said in the Morning Wrap, the market is sitting at an inflection point where it can either:

• Hold these levels and muster up a bounce

• Breach these levels and take another leg down

The problem with the two above paths is that volatility is so high, the market can easily do one and then the other. Wild and very bearish times.

S&P/ASX 200: Faded intraday. There was a little bit of buying towards close but only helped the index lift slightly from session lows.

XJO chart (Source: TradingView, Annotations by Market Index)

S&P/ASX 200 Energy: Holy moly what a reversal. The Energy Index closes 0.07% from session highs of 3.4%. Earlier this week, the Evening Wrap talked about how the brutal selloffs we've seen in energy and oil prices tend to kill the trend. On Tuesday, Goldman Sachs released a report that reiterated its bullish stance on oil. The investment bank said it expects oil to average US$100 in the December quarter and US$108 for 2023. Still, it seems like the market is placing greater emphasis on the demand side.

XEJ chart (Source: TradingView)

S&P/ASX 200 Materials: The reversal was not as dramatic as energy, but still closing lower from a session high of 1.48%. The Chinese Yuan hit a low not seen since 2008, which might hinder China's efforts to introduce more stimulus to buoy its economy. Let's see how this plays out.

XMJ chart (Source: TradingView, Annotations by Market Index)

S&P/ASX 200 Tech: Revisiting recent lows. Is it ready to roll over?

XIJ chart (Source: TradingView, Annotations by Market Index)

S&P/ASX 200 Discretionary: Pretty similar to the Tech chart. Stronger-than-expected retail sales figures was unable to buoy the sector.

XDJ chart (Source: TradingView, Annotations by Market Index)