Market Wraps

Evening Wrap: ASX flat, financials rally on Bank of Queensland result, US futures higher

Wed 12 Oct 22, 4:46pm (AEST)

The S&P/ASX 200 closed 3 points higher, up 0.04%.

The local sharemarket mustered up a small gain thanks to strong advances from banks and real estate stocks, South Korea raises interest rates by 50 bps and

Let's dive in.


ASX close summary
ASX 200, All Ords and All Tech intraday overview

Markets

An unexpectedly positive full year result from the Bank of Queensland helped inspire a broad-based rally among large cap banks and real estate stocks, which helped offset declines from all other sectors.

  • 9 out of 11 sectors declined

  • Financials rallied an outsized 1.9%

  • Utilities, Energy and Healthcare sectors fell more than 1%

  • 46% of the top 200 declined

Announcements

  • Dreadnought Resources (ASX: DRE) +16.3% posted assay results for an additional 43 RC holes which continue to confirm thick, high-grade, rare earth element mineralisation at the Mangaroon Project in WA 

  • Bank of Queensland (ASX: BOQ) +11.1% reported a -5% decrease in FY22 cash profits but expects positive margin momentum heading into FY23

  • Coronado Global (ASX: CRN) +8.0% confirmed that it was in confidential discussions with Peabody Energy regarding a potential transaction

  • Brainchip (ASX: BRN) +3.6% was granted a new US patent for “An Improved Spiking Neural Network”

  • Propel Funeral Partners (ASX: PFP) +2.6% posted 33% revenue growth to $44m for the first quarter of FY23, reflecting “strong season tradition conditions and organic growth.” 

  • Lake Resources (ASX: LKE) +2.0% entered into a Conditional Framework Agreement with South Korean-based battery manufacturer, SK On for offtake of up to 25,000tpa battery grade lithium and a 10% equity stake in the company

Broker updates 

Economy

  • South Korea raised interest rates by 50 bps to 3.0%

    • In-line with analyst expectations

    • “Core inflation and the inflation expectations of the general public have stayed high in the 4% range,” the Bank of Korea said in a statement

    • “Looking ahead, it is forecast that consumer price inflation will remain high in the 5-6% range for a considerable time as the impact of the rising Korean won to US dollar exchange rate acts as additional inflationary pressure.”

    • “Consumer price inflation will be generally consistent with the August forecast of 5.2% in 2022 and 3.7% in 2023, but upside risks are judged to be high due to the rising Korean won to US dollar exchange rate and production cuts by major oil-producing countries, despite downward pressures from the economic slowdown.”

Commodities 

  • Iron ore futures on the Dalian Commodity Exchange fell -2.6%


Latest news


Post market brief

We definitely got something unexpectedly positive today - the Bank of Queensland result. In short, the bank said it expects "positive net interest margin momentum" in FY23 and portfolio arrears continued to decline as "no impacts yet seen from either interest rate rises or fixed rate to variable rate conversions."

"The NIM tailwinds for the entire banking sector are strong. Ex resources, hard to think of an industry with more EPS tailwinds than the financials," said Aequitas Investment Partners.

In the absence of this announcement, we probably would've drifted lower like the US market.

US producer price inflation comes out tonight and inflation data comes out tomorrow night. I haven't looked into analyst comments just yet - but who wants to listen to experts anyway after they all piled into a 50 bps hike for the RBA? The inflation print will have a big impact on equity and bond markets. Looking back at the S&P 500 performance on inflation print days:

  • August 10: +2.15%

  • September 13: -4.3%

  • Jan to Sep average: -1.05%

Index

S&P/ASX 200: Tiny bounce ahead of a big next few days.

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

S&P/ASX 200 Energy: Pulling back into the 20-day.

XEJ 2022-10-12 16-34-39
XEJ chart (Source: TradingView, Annotations by Market Index)

S&P/ASX 200 Materials: Little bounce off the 20-day. Still red.

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

S&P/ASX 200 Real Estate: Double bottom. Previous two rallies have fizzled rather aggressively.

Real Estate Index
XRE chart (Source: TradingView, Annotations by Market Index)

Scans

Top Gainers

Code Company Last % Chg
SGQ ST George Mining Ltd $0.058 +45.00%
OLL Openlearning Ltd $0.036 +28.57%
MRL Mayur Resources Ltd $0.13 +23.81%
SHO Sportshero Ltd $0.026 +23.81%
NRX Noronex Ltd $0.038 +22.58%
View all top gainers

Top Fallers

Code Company Last % Chg
DAF Discovery Alaska Ltd $0.035 -43.55%
HZN Horizon Oil Ltd $0.13 -18.75%
MOZ Mosaic Brands Ltd $0.24 -18.64%
AGD Austral Gold Ltd $0.037 -17.78%
M24 Mamba Exploration... $0.12 -17.24%
View all top fallers

52 Week Highs

Code Company Last % Chg
GME GME Resources Ltd $0.14 +21.74%
CAU Cronos Australia Ltd $0.80 +13.48%
SUM Summit Minerals Ltd $0.20 +11.11%
TMK TMK Energy Ltd $0.02 +11.11%
TIE Tietto Minerals Ltd $0.66 +9.09%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
AGD Austral Gold Ltd $0.037 -17.78%
LNYDA Laneway Resources... $0.20 -16.67%
NAMR Namoi Cotton Ltd $0.05 -16.67%
RTG RTG Mining Inc $0.043 -14.00%
SGA Sarytogan Graphit... $0.25 -13.79%
View all 52 week lows

Near Highs

Code Company Last % Chg
PTB PTB Group Ltd $1.593 +0.16%
NDIA Global X India Ni... $61.41 -0.47%
DTL Data#3 Ltd $6.34 +0.80%
USD Betashares U.S. D... $15.36 -0.13%
NTO Nitro Software Ltd $1.615 -0.92%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
ASX ASX Ltd $66.68 -1.42%
RCAP Resolution Cap Gl... $1.465 +2.09%
SLA Silk Laser Austra... $2.00 +2.04%
EML EML Payments Ltd $0.675 0.00%
APX Appen Ltd $2.63 -1.87%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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