ASX 200 afternoon report: 20th of March 2023

The ASX 200 trades 83 points lower (-1.19%) at 6911 at 2.45 pm.

Hopes that this morning’s announcement that UBS would acquire Credit Suisse would restore confidence in skittish equity markets have been crushed as the ASX 200 slumped back towards key support at 6900.

While the UBS-CSFB announcement has removed a banking pressure point in Europe, concerns remain around the state of the two-tier banking system in the US. This refers to deposits at the too-big-to-fail banks now carrying a Fed guarantee which is in stark contrast to the smaller regional banks that do not.

This situation will continue to encourage deposit outflows from regional into larger banks. For evidence of the type of financial dislocation this contributes to, look no further than the share price of First Republic National Bank, which fell 75% last week.

Banking sector

More broadly, a banking crisis is typically followed by increased funding costs, tighter regulation, and slower loan growth – a toxic combination for bank stocks regardless of size.

• Macquarie fell 3.3% to $169.98
• ANZ fell 0.89%
• Bank of Queensland fell 0.61%
• NAB fell 0.46% to $28.16.

Energy sector

There is no respite for the Energy sector, which is already on the canvas after being pulverised over 10% in the past fortnight.

• Woodside Energy fell 1.66% to $31.41
• Beach Energy fell 1.12% to $1.33
• Santos fell 1.08% to $6.86.

Coal mining sector

Another day of heavy falls for coal miners as the price of coal extended its decline to over 55% during the first three months of 2023.

• New Hope fell 4.6% to $4.95
• Whitehaven fell 4.57% to $6.38
• Coronado Coal fell 2.41% to $1.73.

Consumer-facing stocks

Consumer-facing stocks have fallen as households face tighter lending standards from financial institutions.

• a2M fell 4.71% to $6.07
• Blackmores fell 3.27% to $71.31
• Kogan fell 2.24% to $3.92
• Super Retail Group fell 1.94% to $12.12.

Gold sector

ASX 200 gold miners shined after gold soared towards $1900 on safe-haven flows.

• St Barbara added 12.28% to $0.64c
• Evolution Mining added 10.47% to $2.85
• Northern Star added 8% to $11.77
• Regis Resources added 7.85% to $1.90.

ASX 200 technical analysis

Providing the ASX 200 can hold above support 6910/00, we will continue to view the pullback from the February 7567 high as a correction and expect a rebound to follow. However, should the ASX 200 see a sustained break below support 6910/00, a retest of the bottom of its 12-month range at 6410 is possible.

ASX 200 daily chart

1. TradingView: the figures stated are as of March 20th, 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.