Market Wraps

Evening Wrap: ASX flat, lithium stocks tumble, Qantas rallies on record profit update

Thu 13 Oct 22, 4:23pm (AEST)

The S&P/ASX 200 closed 5 points lower, down -0.07%.

The local sharemarket finished slightly lower ahead of the closely watched US inflation report, Qantas shares rallied after a positive earnings update and lithium stocks sold off after a bearish Morgan Stanley report.

Let's dive in.


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

Markets

It seems like no one wants to sell after a brutal three day selloff earlier this week. But no one wants to buy either, ahead of another high stakes US CPI print.

  • 3 out of 11 sectors advanced

  • Financials rallied strongly for a second day, up 1.47%. On Wednesday, banks rallied after the Bank of Queensland said it expects margins to expand in FY23

  • Discretionary and Industrials also closed in positive territory

  • Lithium stocks sold off heavily after Morgan Stanley released a report flagging a 'large fall' in exports and prices from one of the world's largest producers - Sociedad Química y Minera

  • Real Estate, Health Care and Energy led to the downside, down more than -0.8%

  • 65% of the top 200 declined

Announcements

  • Qantas Airways (ASX: QAN) +8.7% said it expects 1H23 underlying profit before tax to be between $1.2bn to $1.3bn compared to $771m in FY19 

  • Weebit Nano (ASX: WBT) +4.4% advanced its RaRAM select development to fit embedded and discrete applications, greatly increasing its use case 

  • Incannex Healthcare (ASX: IHL) +3.5% completed dosing of trial participants in its phase 1 clinical trial to assess pharmacokinetics and safety of its anti-inflammatory drug IHL-675A

  • Strandline Resources (ASX: STA) +2.5% kicked off the initial stages of commissioning at its Coburn mineral sands project in WA 

  • Medibank (ASX: MPL) shares were halted after a cyber incident. The company said that at this stage, there is no evidence that any sensitive data was accessed 

  • Nib Holdings (ASX: NHF) -11.98% completed a $135m institutional placement at $6.90 per share, an 8% discount to its last closing price

Broker updates 

Economy

Nothing too exciting on the economic front. US inflation data is due at 11:30 pm AEDT. Here’s the rundown.

Whats in CPI

Consensus:

  • Core inflation expected to rise to 6.4% from 6.3% in August

  • Headline inflation expected to ease to 8.2% from 8.3% in August

Views:

  • JPMorgan: “... headline inflation looks to have peaked outside of Europe ... although September releases thus far look to be running slightly above expectations ... Monthly gains in core prices are still .. expected to remain above central bank comfort zones into early next year.”

What to expect:

  • The Fed has made it clear that they all stand behind a 75 bps rate hike in the November meeting. There shouldn’t be any surprises for the Fed's rate hike outlook unless CPI unexpectedly surprises to the upside

  • The market is obviously looking for something cooler-than-expected, maybe a headline print that starts with a 7

  • The hotter-than-expected core inflation reading in August triggered a -4.3% selloff for the S&P 500. Another scotching hot reading could be ugly for markets

Commodities 

Nothing too exciting on the commodity front. Most base metals and energy prices were trading around flat during market hours.

  • Iron ore futures on the Dalian Commodity Exchange fell -1.2%


Latest news


Post market brief

Nothing too exciting today. The market was up 0.54% in early trade but drifted lower and chopped around breakeven. Understandably, who would want to be adding new positions ahead of the all-important US inflation print.

Bulls are looking for something cooler-than-expected to try and revive the 'Fed pivot' narrative. Although its hard to say whether the light at the end of the tunnel is actually the light or a freight train.

Index charts

S&P/ASX 200: Nothing much to see here.

xjo chart
XJO chart (Source: TradingView)

S&P/ASX 200 Energy: Four day losing streak, closing on the 20-day.

xej chart
XEJ chart (Source: TradingView)

S&P/ASX 200 Financials: Bank of Queensland bringing some life back into the sector. Experienced some selling around the 200-day.

XFJ
XFJ chart (Source: TradingView)

S&P/ASX 200 Real Estate: Failed to follow through on the strength on Wednesday.

XRE chart
XRE chart (Source: TradingView)

Scans

Top Gainers

Code Company Last % Chg
AUR Auris Minerals Ltd $0.022 +29.41%
ELO Elmo Software Ltd $3.10 +28.63%
EYE Nova EYE Medical Ltd $0.28 +27.27%
HMI Hiremii Ltd $0.05 +25.00%
M24 Mamba Exploration... $0.145 +20.83%
View all top gainers

Top Fallers

Code Company Last % Chg
DUN Dundas Minerals Ltd $0.525 -38.24%
VOL Victory Offices Ltd $0.026 -27.78%
1CG One Click Group Ltd $0.012 -25.00%
HT8 Harris Technology... $0.015 -21.05%
VTI Visioneering Tech... $0.20 -20.00%
View all top fallers

52 Week Highs

Code Company Last % Chg
BUS Bubalus Resources... $0.225 +12.50%
CY5 CYGNUS Gold Ltd $0.495 +12.50%
TMK TMK Energy Ltd $0.021 +5.00%
ATL Apollo Tourism & ... $0.815 +2.52%
SKS SKS Technologies ... $0.265 +1.92%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
1CG One Click Group Ltd $0.012 -25.00%
HT8 Harris Technology... $0.015 -21.05%
VTI Visioneering Tech... $0.20 -20.00%
AHQ Allegiance Coal Ltd $0.054 -19.40%
SIX Sprintex Ltd $0.028 -17.65%
View all 52 week lows

Near Highs

Code Company Last % Chg
USD Betashares U.S. D... $15.33 -0.20%
NTO Nitro Software Ltd $1.605 -0.93%
SUBD Vaneck Australian... $24.63 +0.12%
MRM Mma Offshore Ltd $0.695 -0.71%
AAA Betashares Austra... $50.11 -0.02%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
ASX ASX Ltd $65.97 -0.68%
IRE Iress Ltd $9.07 +0.78%
EML EML Payments Ltd $0.67 -1.47%
APX Appen Ltd $2.77 +4.14%
MICH Magellan Infrastr... $2.53 -1.94%
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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