ASX 200 afternoon report: 19 March 2024

The ASX 200 trades 27 points (0.36%) higher at 7703 at 3.30pm AEDT.

Following a cagey morning session, the ASX 200 surged above 7700 this afternoon after the RBA kept rates on hold at 4.35% — and moved closer to delivering its first interest rate cut.

The RBA noted that higher interest rates were working to establish a more sustainable balance between demand and supply. However, while goods inflation continues to moderate, sticky services inflation remains a concern.

“Services inflation remains elevated and is moderating at a more gradual pace,” the central bank said.

Nonetheless, encouraged by the cooling labour market, the slowdown in economic activity, and “weak household consumption,” the RBA provided a dovish tilt to its forward guidance.

“The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain, and the Board is not ruling anything in or out,” it added.

Critical economic data to unravel inflation trends

The market will seek further insights into the economy's trajectory and inflation from the following key data ahead of the next RBA meeting on May 7.

• Jobs data for February (Thursday, 21st of March)
• Monthly CPI Indicator (Wednesday, 27th of March)
• Retail Sales for February (Thursday, 28th of March)
• Jobs data for March (Thursday, 18th of April)
• Q1 2024 inflation data (Wednesday, 24th of April)
• Retail Sales for March (Tuesday, 30th of April)

We expect the RBA to cut rates by 25 bp in August and again in November, resulting in the cash rate ending the year at 3.85%.

ASX 200 stocks

Iron ore sector

Returning to the action on the ASX 200, a 4% rally in the price of iron ore overnight following better Chinese industrial production data has boosted the giant iron ore miners.

• Fortescue: + 2.98% to $24.39
• BHP: +2.62% to $43.51
• Rio Tinto: +1.68% to $119.45

Energy stocks

Energy stocks have gained as the price of crude oil hit a four-month high overnight of $82.50 and supply and geopolitical concerns.

• Beach Energy: + 2.03% to $1.75
• AGL Energy: + 1.88% to $8.95
• Santos: + 1.43% to $7.46
• Woodside: + 1.1% to $29.88

Banking sector

The big banks have given back most of yesterday’s gains as the impact of last week’s downgrade from an influential local broker continues to overshadow.

• CBA: - 0.92% to $115.38
• Macquarie: -0.25% to $197.99
• Westpac: -0.23% to $26.28
• NAB: -0.15% to $33.98

ASX 200 technical analysis

The ASX 200 suffered a setback last week as it broke and closed below uptrend support at 7700 from the October 6751 low. Providing the ASX 200 remains below resistance at 7750ish, we expect last week's pullback to deepen initially towards 7500, with scope to 7300. Aware that should the ASX 200 break above resistance at 7750, it opens up a retest of all-time 7853 high.

ASX 200 daily chart

• ^{Source: TradingView. The figures stated are as of 19 March 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.}