ASX 200 afternoon report: 26 September 2023

The ASX 200 trades 38 points (-0.54%) lower at 7038 at 2:30 pm AEST.

Wall Street's remarkable Monday streak

Business as usual on Wall Street overnight as the benchmark S&P 500 closed higher for the twelfth Monday in a row. The rally came despite yields on the US 10-year Treasury rising to their highest level in sixteen years, following a comment from Moody's that a government shutdown would be credit negative for the US sovereign rating.

ASX 200's resilience amidst Wall Street uncertainty

What is driving the Monday rally phenomenon on Wall Street isn't abundantly clear. However, from the opening bell this morning, it was clear that the ASX 200 was in no mood to slavishly follow Wall Street higher as it has done most Tuesdays in recent months. This sentiment was reinforced as US yields rose to fresh highs during the Asian morning, causing equity futures to give back all their overnight gains and more.

With just three full trading days left in September, the ASX 200 is down 1.09% MTD, on track for its second consecutive monthly fall. However, the soft performance at an index level is dwarfed by falls in the interest rate-sensitive ASX Real Estate and IT sectors, down over 5% in September.

The ASX 200 market movements today

IT sector

• Megaport: -2.56% to $11.03
• Link: -2.27% to $1.40
• Nextdc: -1.89%
• Wisetech Global: -1.72% to $66.77

Real estate sector

• Centuria Capital: -2.74% to $1.42
• Lend Lease: -2.44% to $6.98
• Charter Hall: -1.65% to $9.64

Mining sector

Reports yesterday that Chinese property developer Evergrande Group canceled a creditor's meeting made for treacherous conditions today for the big miners following a 4.2% fall in the iron ore price overnight.

• Rio Tinto: -2.06% to $110.85
• Fortescue: -2% to $20.12
• Mineral Resources: -1.89% to $67.09
• BHP: -1.74% to $43.33

Banking sector

Tomorrow sees the release of the Monthly CPI indicator in Australia, which is expected to rise from 4.9% YoY in August to 5.2%. Much higher than 5.4%, and the market may start to think more seriously about an RBA rate hike in November.

• Westpac: -0.38% to $21.04
• NAB: -0.28% to $28.79
• CBA: -0.23% to $99.65
• ANZ: +0.32% to $25.06

Uranium sector

The Uranium price has surged above $70 per pound, its highest level since Japan's Fukushima disaster in 2011, on concerns about tight supply.

• Deep Yellow soared 5.81% to $1.28
• Bannerman Energy gained 3.62% to $2.86
• Paladin Energy rose by 3.83% to $1.08

Qantas faces challenges

The share price of Qantas fell to a fresh 12-month low of $5.06 as the embattled airline warned that higher fuel prices would add to costs and as the pilot's union called for the resignation of Chairman Richard Goyder.

ASX 200 technical analysis

Unless US stock indices cascade much below the 4250/20 support zone noted above, we suspect the ASX 200 will base ahead of year-to-date lows in the 7000/6900 area. We favor using further weakness into month-end to open longs near the 7000/6900 support area. Stops on the view would be placed on a sustained close below 6900.

If support at 6900 gives way, expect to see a test of interim support at 6750 before a push towards the 2022 lows at 6400.

ASX 200 daily chart

• _{TradingView: the figures stated are as of September 26, 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.}