ASX 200 afternoon report: 31 October 2024

The ASX 200 trades 21 points (-0.26%) lower at 8159 at 3.00pm AEDT.

RBA meeting and cautious retail sales highlight economic concerns

The ASX 200 has slipped today in the final trading session of the month, leaving the index on track to finish October approximately 1.3% lower after hitting a fresh record high of 8384 exactly two weeks ago.

Today's decline comes as traders move to the sidelines ahead of next week, which is anticipated to be the biggest week for markets this year. The outcome will shape the path for markets into year-end.

Next week's events include the US election and interest rate decisions from the Reserve Bank of Australia (RBA), Bank of England (BoE), and Federal Reserve (Fed). Additionally, the upcoming National People's Congress Standing Committee (NPCSC) meeting is expected to unveil details of China's fiscal stimulus package.

In the lead-up to next week's RBA meeting, where rates are expected to be kept on hold at 4.35%, retail sales for September rose by a tepid 0.1% month-on-month (MoM), compared to a 0.3% expectation. This follows a 0.7% rise in August, which was boosted by warmer weather, reinforcing the picture that households remain cautious.

Retail giants Woolworths and Coles navigate cost-of-living challenges

Today’s release also includes quarterly retail sales volumes, which rose 0.5% (seasonally adjusted) in the September quarter of 2024. The rise in the September quarter followed consecutive falls of 0.4% in both the June and March quarters of 2024.

Woolworths fell 2.3% to $30.10, extending its 6.10% fall from yesterday following its profit warning. This came as Woolworths customers shifted to lower-margin items due to cost-of-living pressures.

In its first quarter (Q1) update today, rival Coles noted that 'cost of living pressures remain a challenge for our customers.' However, Coles avoided a profit warning, noting that its sales growth had remained broadly in line. It also said it would continue to invest in cheaper prices and promotions to support sales. Coles' share price slipped 1.02% to $17.52.

ASX 200 stocks

Mining sector

• Mineral Resources' share price has surged 10.80% today to $39.98 after agreeing to sell its oil and gas assets in WA to Gina Rinehart’s Hancock Prospecting. The deal eases the balance sheet pressure on Mineral Resources and on its CEO, Chris Ellison, who is facing an investigation into a tax evasion scheme
• Fortescue gained 0.50% to $19.28
• BHP slipped 1.14% to $42.62
• Rio Tinto lost 1.06% to $118.98

Banking sector

The big banks have gained today ahead of the start of their quarterly reports next week.

• NAB added 0.98% to $38.83
• Westpac rose 0.37% to $32.13
• CBA climbed 0.30% to $143.38
• ANZ edged 0.06% higher to $31.24

Energy sector

• AGL Energy has dived 5.47% to $10.54 following a downgrade from an Australian broker who noted the risk from the expiry of its cheap coal and gas supply contracts. The broker noted that AGL’s investment in batteries and other projects will help to fill the gap.

ASX 200 technical analysis

The ASX 200 continues to consolidate below multi-month trend channel resistance, which currently resides in the 8350 - 8360 area, and above important support at 8110 - 8100. A sustained break of either of these levels is needed to indicate in which direction the ASX 200’s next significant move will come.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 31 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.}