ASX 200 afternoon report: 15 August 2024

The ASX 200 trades 24 points (0.30%) higher at 7874 at 1.45 pm AEST.

ASX 200 poised for fifth day of gains despite challenges

The ASX 200 is set for a fifth consecutive day of gains, supported by a rally on Wall Street after the latest US inflation report reinforced the ongoing disinflationary trend, heightening expectations for a Federal Reserve rate cut in September.

However, the index's rally comes despite significant challenges faced by the major miners. Iron ore prices continued their decline, dropping to US$95.00 per tonne, following a warning yesterday from Baowu Steel Group's Chairman about a severe crisis in China's steel industry amid a worsening property sector downturn.

Jobs report and labour market outlook

Today's jobs report for July delivered mixed signals. The Australian economy added 58,200 jobs in July, significantly stronger than the 20,000 gain the market had expected. However, the unemployment rate increased to 4.2%, up from 4.1% last month, reaching its highest level since November 2021, as the participation rate surged to a record high of 67.1% from 66.9%.

Despite this, the labour market continues to show resilience, cooling more slowly than anticipated. With the participation rate at new highs, the Reserve Bank of Australia (RBA) has room to keep rates on hold in September while assessing incoming data.

ASX 200 stocks

Mining sector

• Rio Tinto slid 3.1% to $108.95
• Fortescue fell 1.33% to $17.09
• Mineral Resources lost 1.04% to $45.85
• BHP lost 0.52% to $39.42

Consumer facing stocks

• Baby Bunting climbed 5.93% to $1.43
• Cettire added 4% to $1.30
• ZIP increased 3.9% to $1.95
• Kogan edged 0.59% higher to $4.25

Financial sector

• Magellan surged 8.09% to $10.49 following a robust 31% year-over-year (YoY) increase in NPAT to $238 million, with performance fees hitting $19.2 million - the highest since FY21
• ANZ climbed 2% to $29.31
• Westpac rose 1.87% to $29.38
• Macquarie gained 1.55% to $208.97
• NAB gained 0.87% to $36.10
• CBA added 0.85% to $135.35

Mining sector

• Origin Energy plummeted 9.91% to $9.55, as traders shifted focus from a 58% rise in underlying profits to $1.18 billion to the company's tepid outlook for the upcoming year

Telecommunications sector

• Telstra hit a six-month high at $3.99 on the back of a 7.5% increase in underlying full-year profit to $2.3 billion and a dividend boost to $0.18 per share, up 5.9% YoY

ASX 200 technical analysis

After bottoming out at 7628 last week, just above the 200-day moving average at 7606, the ASX 200 has recovered roughly half of the losses incurred from the early August decline from the 8148 high. If the ASX 200 can extend its rally and break through the former resistance at 7910/20, a retest of the 8148 high is likely. However, unless it surpasses 7910/20, the downside risks remain, with potential for a drop back towards the 7628 low.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 15 August 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.}