ASX 200 afternoon report: 17 October 2023
Your ASX 200 afternoon report
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The ASX 200 trades 31 points (0.44%) higher at 7057 at 3.20 pm AEDT.
The ASX 200 trades 31 points (0.44%) higher at 7057 at 3.20 pm AEDT.
ASX 200 decreases after RBA’s meeting
After a blistering 1% rally to start today's session, the ASX 200 has trimmed a good chunk of its gains after more hawkish than-expected RBA meeting minutes.
RBA board members under new Governor Michele Bullock, noting that the "Board has a low tolerance for a slower return of inflation to target than currently expected" and that "further tightening of policy may be required should inflation prove more persistent than expected."
We have consistently noted that after last month's robust labour force report, we thought the chance of one more 25bp rate hike to 4.35% before year-end was underpriced.
Q3 inflation report
Whether a hotter-than-expected Q3 inflation report next Wednesday, sees the RBA deliver an unwelcome Melbourne Cup Day rate rise surprise, will depend on how geopolitical events in the Middle East play out over the next three weeks.
If tensions in the Middle East were to escalate between now and then, talk of a rate hike could be replaced with conversations around rate cuts.
Today's market movement
IT sector
Returning to markets, the IT sector has rebounded, taking its lead from the Nasdaq, which locked in a 1.18% to start the week.
- ZIP: +7.14% to $0.30c
- EML Payments: + 4.23% to $1.11
- Megaport: + 4.25% to $11.53
- Block: + 2.66% to $70.72
Resources sector
Chatter around further Chinese stimulus measures to be unveiled in the coming weeks helped by iron ore price add 2.59% overnight to $117.25 per tonne.
- Mineral Resources: + 2% to $63.53
- Rio Tinto: + 1.68% to $117.66
- BHP gained 1.33% to $45.78
- Fortescue: + 1.3% to $21.82
Banking sector
- Macquarie: + 0.73% to $168.93
- Westpac: + 0.73% to $21.46
- NAB: + 0.69% to $29.33
- CBA: 0.35% to $101.04
Consumer-facing stocks have fallen on talk that the RBA has unfinished business hiking rates.
- Harvey Norman: - 2.12% to $3.69
- Myer: - 1.9% to $0.51c,
- Super Retail Group: -1.3% to $$12.13
- JB Hi-Fi: - 1.28% to $45.90.
Healthcare sector
The ASX 200 healthcare sector, which fell to a three-and-a-half-year low yesterday, stumbled again.
- Telix Pharma: - 1.25% to $10.28
- Pro Medicus: - 1% to $81.42
- Bionic ear company Cochlear: - 0.71% to $253.28
- Biotech giant CSL: - 0.59% to $238.42
ASX 200 technical analysis
In late September, we turned tactically bullish on the ASX 200 (just above 7000), looking for a rebound towards range (7440) highs and possibly year-to-date highs (7567). Stops on the bullish view are a sustained close below 6900/70ish.
ASX 200 daily chart
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TradingView: the figures stated are as of October 17, 2023. 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.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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