ASX 200 afternoon report: 25 July 2024

The ASX 200 trades 90 points (-1.14%) lower at 7873 at 3.00pm AEST.

Sharp decline amidst global market volatility

Today, the ASX 200 dipped to a two-week low of 7866.1, reacting to a downturn on Wall Street that has impacted regional equity markets globally. The Nikkei recorded a 2.82% loss, reaching a month-low, while South Korea's Korea Composite Stock Price Index (KOSPI) dropped by 1.88%.

The rapid decline in risk sentiment can be traced back to disappointing earnings reports from tech giants Tesla and Alphabet, which led to the Nasdaq suffering its worst daily performance (-3.65%) since the 2022 technology sector downturn.

Impact of regional pressures and market responses

Regional equity markets are currently grappling with issues closer to home, including a concerning economic slowdown in China and the potential impact of proposed tariffs by former US President Donald Trump, which could further decelerate the Chinese economy.

The sharp drop in the AUD/USD exchange rate this week has served as a warning, highlighting the risks associated with China’s economic slowdown and broader negative sentiment. Initially, the ASX 200 appeared unresponsive, maintaining stability during the first three days of the week. However, today’s significant downturn has acted as a wake-up call for the market.

ASX 200 stocks

Resource stocks

• Fortescue lost 4.81% to $20.30
• Mineral Resources lost 1.56% to $51.84
• Rio Tinto lost 0.62% to $113.70
• BHP lost 0.36% to $41.40

Energy sector

• Santos lost 3.42% to $7.63
• Beach Energy lost 1.03% to $1.44
• Woodside Energy dropped 0.73% to $27.04
• Viva Energy lost 0.66% to $3.01

IT sector

• Afterpay owner Block dived 6.43% to $94.28
• Appen lost 5.5% to $0.43
• Wisetech Global lost 3.22% to $92.01
• Megaport fell 3.23% to $10.7

Consumer-facing stocks

• Cettire lost 3.39% to $1.35
• Kogan fell 3.17% to $4.27
• Temple and Webster lost 2.78%
• Myer Holdings fell 2.15% to $0.79

Gold stocks

• Regis Resources lost 9.03% to $1.73 after reporting lower output than the previous year and higher average costs
• Perseus Mining lost 3.72% to $2.59
• Evolution Mining fell 3.05% to $3.98
• Gold Road Resources lost 1.8% to $1.77

ASX 200 technical analysis

Today’s sell-off has caused technical damage to the ASX 200, pushing it below critical support levels at 7910/7900. Earlier this week, it was noted that a sustained break below 7900/7850 would be necessary to confirm that the recent surge to 8083 was unsuccessful.

The significance of the 7900/7850 support zone lies in its role as the threshold of broken trendline resistance (now support) starting from the April high of 7910.5 and including the mid-May high of 7900. A continued decline below 7850 would validate the rally to 8083 as a false breakout and indicate that a deeper pullback towards 7700 could be forthcoming.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 25 July 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.}