ASX 200 afternoon report: 22 October 2024

The ASX 200 trades 133 points (-1.60%) lower at 8210 at 3.15pm AEDT.

The ASX 200 has taken a significant hit in today’s session, heading for its worst performance since a 150-point drop in early September.

Wall Street woes and rising yields

Today's sell-off comes after the current pack leaders on Wall Street, the Dow Jones, and the S&P 500 slipped overnight, as investors moved to the sidelines after six weeks of gains and ahead of key earnings reports.

Adding to Wall Street's weakness, US Treasury yields rose overnight, ending 7 to 11 basis points (bps) higher across the curve. The benchmark US 10-year Treasury yield reached 4.18%, its highest level in three months.

Higher yields seem to reflect market expectations of a potential Trump election victory, with increased inflation and fiscal spending. Rubbing salt into the wound, US yields have continued to climb during the Asian trading session, with the yield on the US 10-year Treasury currently trading 3 bps higher at 4.21%.

Why does this impact the ASX 200?

According to S&P Global, the interest rate-sensitive ASX financial sector accounted for 46.6% of the ASX 200 as of 30 September. The real estate sector, a similarly rate-sensitive area, makes up 10.8%. Additionally, two consumer-facing sectors collectively account for another 10%. When combined, a significant 67% of the ASX 200 exhibits heightened sensitivity to interest rates and yields.

ASX 200 stocks

Real estate sector

The real estate sector fell 2.4%.

• Lend Lease down 3.9% to $6.65
• Charter Hall down 3.76% to $15.63
• Stockland dropping 2.8% to $5.22
• Dexus losing 2.61% to $7.28

Banking sector

• Macquarie fell 2.31% to $233.67
• NAB dropped 2.03% to $38.62
• CBA slipped 2% to $141.56
• Westpac lost 1.85% to $31.91
• ANZ eased 1.02% to $31.91

Consumer discretionary sector

• Harvey Norman losing 2.86% to $4.58
• JB Hi-Fi down 2.83% to $78.72
• Super Retail Group dropping 2.45% to $16.51
• Baby Bunting losing 2.25% to $1.96

Mining sector

Normally, when interest rate-sensitive sectors struggle, investors rotate into large miners but not today.

• Mineral Resources fell 2.93% to $38.38
• Rio Tinto slipped 1.25% to $118.31
• Fortescue fell 1.4% to $19.56
• BHP lost 1.23% to $42.11

ASX 200 technical analysis

This week, the ASX 200 is challenging multi-week trend channel resistance between 8325 and 8330. A sustained break and close above this level could propel the index towards 8450 by year-end.

Conversely, a failure to see a sustained close above 8320/25 combined with a fall through support at 8110/00 would warn that a medium-term high has been struck at 8384.5 and that a deeper pullback is underway..

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 22 October 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}