ASX 200 afternoon report: 18 June 2024

The ASX 200 trades 69 points (+0.90%) higher at 7769 at 3.30pm AEST.

ASX 200 rebounds and inflation remains above target

The ASX 200 has rebounded strongly today, buoyed by gains on Wall Street and after the Reserve Bank of Australia (RBA) kept rates on hold at 4.35% for a fifth consecutive meeting.

In the accompanying statement, the RBA noted that while inflation is easing, it has been doing so more slowly than previously expected, and inflation remains well above the midpoint of its 2-3% target range.

Unwavering inflation prolongs hold on RBA rate

The RBA reiterated that returning inflation to target within a reasonable time frame remains its priority and that the Board wasn't "ruling anything in or out."

Today's RBA Board meeting outcome was neutral, in line with expectations. The RBA rate will remain on hold until it gets a clearer reading that inflation is on track to return to target, or the economy hits a pothole.

Economic and inflation data

The following key data will provide further insights into the economy's and inflation's trajectory ahead of the RBA's 6 August meeting.

• Monthly CPI indicator for May: Wednesday, 26 June
• RBA Meeting Minutes: Tuesday, 2 July
• Labour Force Report: Thursday, 18 July
• Retail Sales for June: Friday, 26 July
• Q2 Inflation: Wednesday, 31 July

Before the RBA's 2.30pm announcement, the rates market priced in 16 bp of RBA rate cuts for December, with a first full 25 bp cut priced by April. This pricing has been reduced slightly to about 12 bp of rate cuts by December.

ASX 200 stocks

Banking sector

• CBA hit a fresh record high of $127.99 before paring gains to trade at $127.45 (1.57%)
• NAB gained 1.76% to $35.88
• ANZ added 1.22% to $129.16
• Westpac added 0.95% to $27.22

Healthcare stocks

• CSL rose 1.8% to a four-month high of $294.19
• Ansell gained 2.09% to $26.32
• Sonic Healthcare added 1.67% to $26.23
• Cochlear added 1.43% to $331.96
• Ramsay Healthcare added 1.01% to $48.87

Mining sector

The big miners have risen despite the ongoing downturn in the Chinese housing market.

• Rio Tinto added 0.66% to $118.94
• Mineral Resources added 0.59% to $61.38
• BHP gained 0.52% to $42.67
• Fortescue dived 5.5% to a seven-month low of $21.71

ASX 200 technical analysis

The view remains that the ASX 200 will trade sideways between 7900 and 7600 this month, before an eventual break higher in the new financial year towards 8000. A sustained move above resistance at 7900/10 would confirm that the next leg higher has commenced.

On the downside, a sustained break below support at 7630/00 would open a deeper decline towards 7435 (the 200-day moving average).

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 18 June 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.}