ASX 200 afternoon report: 20 August 2024
Find out below who have been the shakers and movers in today’s session on the ASX 200.
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The ASX 200 trades 16 points (0.20%) higher at 7996 at 3.30pm AEST.
ASX 200 continues upward trend
The ASX 200 is primed for an eighth straight day of gains, mirroring the mood on Wall Street. Investors are increasingly optimistic that Thursday's Federal Open Market Committee (FOMC) meeting minutes and Federal Reserve Chair Powell's remarks at Jackson Hole will signal a potential interest rate cut in September.
Divergence in RBA stance
The situation in Australia contrasts sharply. The Reserve Bank of Australia’s (RBA) August board meeting minutes revealed that while the board considered raising rates, it ultimately decided that the case to leave rates unchanged was stronger.
The minutes noted, "Underlying inflation had fallen very little over the prior year in quarterly terms and, while the June quarter outcome had been in line with the staff's forecast, inflation was still some way above target."
In the final paragraph of the minutes, it was highlighted that "based on the information available at the time of the meeting, it was unlikely that the cash rate target would be reduced in the short term, and that it was not possible to either rule in or rule out future changes in the cash rate target."
ASX 200 stocks
Materials sector
The materials sector has snapped its six-day losing streak on the back of bargain-hunting in the big miners.
Mining sector
It was a dark day for Yancoal, as the market digested its earnings report, which saw a 21% decline in revenue and a 57% fall in profits after tax to $420 million.
- Yancoal dived 13.79% to $6.00
Banking sector
The big banks have moved to boost their margins by slashing interest rates on term deposits. This move aligns with expectations in the interest rate market of rate cuts from the RBA. Currently, the Australian interest rate market has 20 basis points (bp) of RBA rate cuts priced for December, with a cumulative 75 bp expected over the next 12 months, bringing the cash rate down to 3.60%.
While the banks' adjustments to term deposit rates reflect shifts in the underlying market prices, they are not being matched by equivalent reductions in lending rates, allowing the banks to enjoy increased profits in the interim.
ASX 200 techinical analysis
The ASX 200's rebound from the 7600/7500 support area, which includes the 200-day moving average, has reinforced its importance as the downside level to watch going forward.
While current focus is on whether the ASX 200 can test and break its all-time high of 8148, a retest of the 7600/7500 level before year-end would not be surprising.
ASX 200 daily chart
![ASX 200 daily chart](http://a.c-dn.net/c/content/dam/publicsites/igcom/au/images/News-and-articles/asx20aug.png/jcr:content/renditions/original-size.webp)
- Source: TradingView. The figures stated are as of 20 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.
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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