ASX 200 afternoon report: May 22, 2023

The ASX 200 trades 12 points (-0.17%) lower at 7267 at 3.30pm AEST, taking its lead from a weaker session on Wall Street on Friday as US debt ceiling negotiations stalled.

Talks are set to resume later today between House Speaker Kevin McCarthy and US President Joe Biden, reminded by Treasury Secretary Janet Yellen that the chances that the US can pay its bills after mid-June are low.

While the debt saga drags on, the market is doing its best to find tradable themes. The easiest of which appears to be the outperformance of US Megatech, providing a tailwind to the local technology sector.

IT sector

Building on last week’s 5.33% gain, the ASX 200 IT sector has gained today, led by Altium.

• Altium added 1.33% to $37.42
• Xero added 1% to $109.06
• Wisetech Global added 0.91% to $71.85
• Tyro Payments fell 15.64% to $1.29 after suitor Potential Capital walked away from the company.

Buy now, pay later sector

Regulatory changes are afoot for the BNPL sector, which will now see its products treated as credit products requiring providers required to have a credit license and minimum standards of conduct.

• Zip fell 2.61% to $0.56c
• Block fell 1.13% to $88.28
• Sezzle traded flat at $0.64c.

Coal sector

New Hope Coal gained 1.37% to $5.19 after a solid Q3 trading update. Gains also for the giant iron ore miners as the price of iron ore held above $100 p/t despite a soft fortnight of Chinese economic data that have sparked “double dip” concerns.

• BHP added 0.48% to $44.38
• Rio Tinto added 0.37% to $109.82
• Fortescue Mining added 0.12% to $20.55.

Banking sector

The big banks have fallen, led by ANZ.

• ANZ fell 0.92% to $23.75
• CBA fell 0.8% to $99.00
• Westpac fell 0.66% to $21.09
• NAB fell 0.6% to $26.64.

Lithium sector

After a remarkable run, the Lithium sector succumbed to a round of profit-taking led by Galan Lithium which fell 11.25% to $1.06 after it completed its institutional capital raise at $1.05c.

• Core Lithium fell 4% to $1.08
• Lake Resources fell 3.2% to $0.61c
• Allkem fell 3.4% to $15.07.

Last week’s worst-performing sectors, Consumer Discretionary and Consumer Staples, have started the new week on the back foot. Metcash fell 4.1% to $3.63, Super Retail Group fell 3.11% to $12.30, JB Hi-Fi fell 2.74% to $45.16, and Costa Group fell 2.21% to $2.44.

Finally, today City Chic fell 11.7% to $0.34c after it revealed its sales slumped 15.2% year-on-year for the 45 weeks to May 14. City Chic’s share price has since rallied to be trading at $0.375c (-2.6%).

ASX 200 technical analysis

We remain neutral while the ASX 200 trades sideways above a strong layer of support between 7100 and 6900 (from the 200-day moving average, uptrend support and year-to-date lows). And below downtrend resistance at 7325, coming from the February 7567 high.

ASX 200 daily chart

1. TradingView: the figures stated are as of April 18, 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.