Market Wraps

Evening Wrap: ASX rallies led by iron ore and lithium, China's GDP growth beats expectations

Mon 24 Oct 22, 4:44pm (AEST)

The S&P/ASX 200 closed 103 points higher, up 1.54%.

Wall Street handballed us a strong session, with all sectors closing in positive territory. China posted its delayed GDP figures - which came in ahead of expectations, Hong Kong's Hang Seng Index nosedives to levels not seen since the Global Financial Crisis and the Yen experiences wild swings as the Bank of Japan intervenes.

Let's dive in.


Today in Review

Mon 24 Oct 22, 4:35pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 6,779.4 +1.54%
All Ords 6,978.4 +1.58%
Small Ords 2,723.3 +2.05%
All Tech 2,033.6 +2.70%
Emerging Companies 2,099.3 +1.55%
Currency
AUD/USD 0.6339 -0.31%
US Futures
S&P 500 $3,768.5 +0.12%
Dow Jones $31,146.0 +0.07%
Nasdaq $11,378.0 +0.17%
Name Value % Chg
Sector
Materials 15,733.8 +2.51%
Information Technology 1,430.2 +2.25%
Utilities 6,683.8 +1.88%
Health Care 39,829.2 +1.86%
Consumer Discretionary 2,745.8 +1.65%
Real Estate 2,819.3 +1.36%
Communication Services 1,370.2 +1.31%
Industrials 5,998.6 +1.04%
Financials 6,362.1 +1.02%
Consumer Staples 12,338.7 +0.90%
Energy 11,389.8 +0.74%

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Markets

The ASX 200 had a crack at rallying to a one month high but closed slightly off session highs. Markets are taking off as the Fed pivot narrative comes back into play - the Fed is expected to deliver one last jumbo sized 75 bp hike in November and begin slowing the pace of hikes. Bond yields pulled back sharply in response, which is fueling the recent gains for equity markets.

  • All 11 sectors green

  • Materials led to the upside thanks to gains from lithium, iron ore and gold miners

  • Tech also rallied in-line with the Nasdaq, which closed 2.3% higher last Friday

  • Energy was the worst performing sector, but still on a three day winning streak, up more than 6%

  • 85% of the top 200 advanced

Economy

  • China Q3 GDP growth was 3.9% year-on-year from 0.4% in Q2

    • Ahead of analyst expectations of 3.4%

  • China industrial production rose 6.3% year-on-year in September from 4.2% in August

    • Ahead of analyst expectations of 4.5%

  • China retail sales rose 2.5% year-on-year in September from 5.4% in August

    • Missed analyst expectations of 6.0%

  • RBA assist governor Christopher Kent speech

    • "The size and timing of rate increases in Australia will depend on incoming data – including the response of household spending to the tightening in financial conditions that is still working its way through the system."

    • "Rate increases will also depend on the outlook for inflation and the labour market."

Commodities 

Nothing too exciting happened after the better-than-expected Chinese GDP numbers. Most commodities slightly eased after posting some gains last Friday.

  • Iron ore futures on China's Dalian Commodity Exchange rose 0.1%

  • Brent crude oil fell -0.94% to US$92.58 a barrel


Latest news


Post market brief

The ASX 200 surged in the first few minutes of trade and traded mostly lower until the last hour of trade. Overall, a day that was mostly in-line with what happened on Wall Street.

US bond yields continued to ease during our session. The US 2-year Treasury yield is on a two day losing streak, trading around 4.43% from last week's highs of 4.62%.

US02Y 2022-10-24 16-22-48.png ‎- Photos
US 2-year Treasury yield (Source: TradingView)

Unfortunately, things aren't as simple as yields down, stocks up.

It's a massive week for US corporate earnings. It's more than likely we wake up to days where <insert mega cap company name here> moves the market. Notably, there's Alphabet, Microsoft and Visa all reporting after hours on Wednesday.

Asian markets are also under a significant amount of stress after China's Xi rolled out a clean sweep and consolidation of power an unprecedented third term as President. Hong Kong's Hang Seng Index is currently down -5.4% to levels not seen since the Global Financial Crisis. The Shanghai Composite is also down -1.4% to a March 2019 low.

The Japanese Yen is also experiencing wild swings amid further intervention by the Bank of Japan. The US dollar has appreciated almost 30% year-to-date against the Yen.

Markets remain extremely volatile and that's only going to be further exacerbated by the long list of earnings, politics and currency headlines we're going to see this week.

Index

S&P/ASX 200: Forming a bit of a range between 6,820 and 6,635.

XJO chart
XJO chart (Source: TradingView)

Major announcements

  • Galan Lithium (ASX: GLN) +17.3% posted a 250% increase in mineral resource to 5.8mt contained lithium for its Hombre Muerto West Project in Argentina 

  • Vulcan Energy (ASX: VUL) +13.4% said its chemical engineering team successfully produced the ‘highest grade, lowest impurity lithium hydroxide’ to date from its pilot plant

  • Neometals (ASX: NMT) +10.5% was granted an environmental permit for its vanadium recovery plant in Finland  

  • Pilbara Minerals (ASX: PLS) +6.1% sold another 5,000 dmt cargo of lithium spodumene at US$7,255 a tonne 

  • Integral Diagnostics (ASX: IDX) +0.8% terminated the agreement to acquire the Exact Radiology business, which consisted of 11 clinics in South-East Queensland

  • Bank of Queensland (ASX: BOQ) +0.3% plans to raise $300m through the offer of Capital Notes 3. Its expected to pay a distribution between 3.4% to 3.6% 

  • Viva Energy (ASX: VEA) +0.4% said September quarterly sales volumes reached their highest level since pre-covid, with Group sales up 19.7% to 3,650m barrels of oil

  • Betmakers (ASX: BET) 0% entered into a share purchase deed to acquire ABettorEdge, a horse betting technology provider 


Broker updates

Ticker

Name

Broker

Rating

Target price

360

Life360

Morgan Stanley

Overweight

$8.50

BEN

Bendigo & Adelaide Bank

Macquarie

Outperform from Neutral

$9.25 from $9.00

IAG

Insurance Australia

Morgans

Add from Hold

$5.24 from $4.95

NVX

Novonix

Morgans

Speculative Buy

$3.11

RBL

Morgans

Morgans

Buy

$1.00 from $1.65

SDF

Steadfast

Ord Minnett

Buy from Accumulate

$5.50

SMR

Stanmore

Morgans

Add

$1.40

WHC

Whitehaven

Morgans

Add

$11.50


Scans

Top Gainers

Code Company Last % Chg
W2V Way 2 Vat Ltd $0.036 +44.00%
IS3 I Synergy Group Ltd $0.043 +34.38%
NVX Novonix Ltd $2.95 +33.48%
MKL Mighty Kingdom Ltd $0.038 +26.67%
DVL Dorsavi Ltd $0.015 +25.00%
View all top gainers

Top Fallers

Code Company Last % Chg
OXX Octanex Ltd $0.011 -42.11%
DTI DTI Group Ltd $0.016 -27.27%
BTR Brightstar Resour... $0.015 -25.00%
DEL Delorean Corporat... $0.085 -22.73%
BCC Beam Communicatio... $0.19 -20.83%
View all top fallers

52 Week Highs

Code Company Last % Chg
NOR Norwood Systems Ltd $0.021 +10.53%
LGI LGI Ltd $1.95 +10.48%
NTI Neurotech Interna... $0.125 +8.70%
LCT Living Cell Techn... $0.014 +7.69%
AKG Academies Austral... $0.43 +7.50%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
OXX Octanex Ltd $0.011 -42.11%
BCC Beam Communicatio... $0.19 -20.83%
FLX FELIX Group Holdi... $0.12 -20.00%
MGT Magnetite Mines Ltd $0.017 -17.50%
VMC Venus Metals Corp... $0.12 -14.29%
View all 52 week lows

Near Highs

Code Company Last % Chg
WVOL Ishares Edge MSCI... $34.33 +0.56%
WBCPI Westpac Banking C... $102.93 -0.07%
PMGOLD Gold Corporation $26.11 +0.89%
VVLU Vanguard Global V... $58.65 +1.30%
ETPMPM Global X Metal Se... $206.87 +0.17%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
DGL DGL Group Ltd $1.395 +7.31%
COE Cooper Energy Ltd $0.228 +5.81%
EML EML Payments Ltd $0.653 +3.57%
LFG Liberty Financial... $3.72 -1.06%
MGH Maas Group Holdin... $2.425 +3.63%
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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