Market Wraps

Evening Wrap: BHP, Rio Tinto and Fortescue power the ASX 200 higher

Fri 15 Sep 23, 4:22pm (AEDT)

The S&P/ASX 200 closed 93 points higher, up 1.29%. 

The Index finishes the week up 1.7% and above its 200-day moving average, resource stocks rallied on China stimulus and better-than-expected economic data, UBS is bullish on coal miners and why the market's in a bit of a bullish dilemma.

Let's dive in.


Today in Review

Fri 15 Sep 23, 4:18pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,279.0 +1.29%
All Ords 7,482.6 +1.35%
Small Ords 2,811.1 +1.66%
All Tech 2,569.3 +1.25%
Emerging Companies 2,023.5 +1.47%
Currency
AUD/USD 0.6464 +0.37%
US Futures
S&P 500 $4,514.5 +0.19%
Dow Jones $34,983.0 +0.17%
Nasdaq $15,508.0 +0.19%
Name Value % Chg
Sector
Materials 17,935.3 +2.54%
Information Technology 1,834.4 +1.93%
Energy 11,958.6 +1.68%
Consumer Discretionary 3,142.6 +1.09%
Industrials 6,711.1 +0.98%
Financials 6,452.8 +0.97%
Consumer Staples 12,484.0 +0.85%
Communication Services 1,521.3 +0.55%
Real Estate 3,098.7 +0.42%
Health Care 39,154.9 +0.29%
Utilities 8,535.6 +0.28%

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ASX 200 Session Chart

ASX 200 intraday
ASX 200 higher but closes off session highs (Source: Market Index)

Markets

The ASX 200 rallied and finished off session highs of 1.85%. Every sector finished higher, led by growth and resources. The local market is feeling the kick from the the Arm IPO (which closed almost 25% higher from its offer price) as well as more stimulus and positive economic data out of China.

We've seen a strong response from the resource space, with outsized gains from Fortescue (+4.0%), BHP (+3.5%), Rio Tinto (+3.0%) and Sandfire (+3.3%) Resources. It was interesting to see Woodside (+1.4%) fade from session highs of 2.4%.

Economy

China’s slew of economic data was largely ahead of expectations in August:

  • House price index down 0.1% year-on-year 

  • Industrial production up 4.5% vs. 3.9% expected

  • Retail sales up 4.6% vs. 3.0% expected

  • Fixed asset investment up 3.2% vs. 3.3% expected

  • Unemployment rate eased to 5.2% from 5.3% July


Latest news


A Bullish Dilemma

The ASX 200 has pushed from its recent 7,150 to 7,200 trading range and above the trendline noted in the chart below.

ASX 200
ASX 200 daily chart (Source: TradingView)

The market is finding some strength amid:

  • More China stimulus (and forgetting about its credit crisis)

  • Arm IPO was 12 times oversubscribed (reflecting strong risk appetite)

  • As well as recent filings from names like Instacart, Birkenstock and Klaviyo, all of which are projected to have multi-billion dollar valuations

If we look at how the market's performed in the past year, it's had the tendency to rally hard but fall just as hard. We're seeing a bit of momentum now, but the question is, how long can it last amid:

  • Bond yields: A benchmark like the US 2-year has been sitting around the 5.0% level for the past few weeks

US 2Y
US 2-year Treasury Yield (Source: TradingView)
  • Oil prices: Oil prices are back above US$90 a barrel. What will that mean for consumers and inflation? Us headline inflation accelerated to 3.7% in August from 3.2% in July mostly due to a 5.6% month-on-month uptick in energy prices


Interesting news and movers

Trading higher

  • +17.7% Sezzle (SZL) – Resumes Nasdaq trading (Thu)

  • +9.2% Develop Global (DVP)

  • +8.9% Australia Ethical (AEF)

  • +5.3% Polynovo (PNV)

  • +5.1% Bigtincan (BTH) – Reduce Opex

  • +4.8% Stanmore Resources (SMR)

  • +3.2% Iluka Resources (ILU)

  • +3.3% Adbri (ABC)

  • +3.3%  Pinnacle Investment Management (PNI)

  • Iron ore sector move: Champion Iron (+5.9%), Fortescue (+4.0%), BHP (+3.5%), Rio Tinto (+3.0%)

Trading lower

  • -26.7% Brockman Mining (BCK)

  • -5.2% Ainsworth Gaming (AGI)

  • -4.0% Duratec (DUR)


Broker notes

UBS on coal:

  • “Met coal prices are up >20% 1mth to US$312/t amid soft Q3-CY23 seaborne shipments and China stimulus expectations.”

  • “Australian coal exports in Jul/Aug-23 were 32.5/28.7Mt respectively, with Aug-23 a seasonal 11-year low, driven in part by maintenance across the sector and weakness post FY23.”

  • “Drier weather conditions across Australia and Q4 being a seasonally stronger period for shipments could pressure prices lower.”

  • “We remain positive coal miners and CRN (Buy rated A$1.90/sh) remains our preferred exposure with strong leverage to higher met coal prices.”


Scans 

Top Gainers

Code Company Last % Chg
OZM Ozaurum Resources... $0.087 +171.88%
E25 Element 25 Ltd $0.44 +41.94%
GTR Gti Energy Ltd $0.011 +31.25%
NVX Novonix Ltd $0.89 +29.93%
BNR Bulletin Resource... $0.077 +28.33%
View all top gainers

Top Fallers

Code Company Last % Chg
BGE Bridge Saas Ltd $0.021 -34.38%
BCK Brockman Mining Ltd $0.022 -26.67%
14D 1414 Degrees Ltd $0.031 -18.42%
KCC Kincora Copper Ltd $0.036 -18.18%
BXN Bioxyne Ltd $0.014 -17.65%
View all top fallers

52 Week Highs

Code Company Last % Chg
OZM Ozaurum Resources... $0.087 +171.88%
FBM Future Battery Mi... $0.135 +17.39%
EME Energy Metals Ltd $0.185 +8.82%
ECL Excelsior Capital... $2.90 +6.23%
MGV Musgrave Minerals... $0.36 +5.88%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
BGE Bridge Saas Ltd $0.021 -34.38%
14D 1414 Degrees Ltd $0.031 -18.42%
KCC Kincora Copper Ltd $0.036 -18.18%
BMO Bastion Minerals Ltd $0.021 -12.50%
ASO Aston Minerals Ltd $0.036 -12.20%
View all 52 week lows

Near Highs

Code Company Last % Chg
PCI Perpetual Credit ... $1.03 +0.49%
WVOL Ishares Edge MSCI... $36.96 +0.54%
PMGOLD Gold Corporation $29.55 -0.14%
GCI Gryphon Capital I... $2.01 +0.50%
VVLU Vanguard Global V... $66.21 +0.96%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
WTC Wisetech Global Ltd $68.85 +1.80%
CLG Close the Loop Ltd $0.365 +2.82%
ABG Abacus Group $1.08 -0.92%
BGA Bega Cheese Ltd $2.885 +1.59%
LLL Leo Lithium Ltd $0.505 0.00%
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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