ASX 200 afternoon report: 26 September 2024

The ASX 200 trades 70 points (0.87%) higher at 8195 at 3.00pm AEST.

Chinese stimulus and easing inflation propel ASX 200 higher

The ASX 200 has snapped its three-day losing streak, propelled higher by yesterday's cooler Australian inflation release and reports this morning of a potential 1 trillion yuan ($142 billion) injection into China’s state banks.

This funding, likely sourced from new special sovereign bonds, would complement the monetary policy easing announced earlier this week. These measures include cuts to the Reserve Requirement Ratio (RRR), policy interest rate reductions, and mortgage rate cuts for existing borrowers. These steps are in response to the downside risks to the government's “around 5%” real gross domestic product (GDP) growth target.

Economic measures and fiscal stimulus

As noted after the People’s Bank of China's (PBOC) easing measures announced on Tuesday, while rate cuts are a positive step, fiscal stimulus is essential to boost household consumption and rejuvenate flagging consumer confidence. Experts believe that a more substantial four trillion-yuan injection is needed to transform this week's immediate boost into a lasting impact.

ASX 200 stocks

Mining sector

The big miners extended their rally.

• Mineral Resources rose 2.13% to $42.20
• Rio Tinto gained 1.00% to $122.99
• BHPclimbed 0.33% to $42.75

Uranium stocks

Uranium stocks extended their explosive form.

• Bannerman Energy soared 8.45% to $3.21
• Boss Energy gained 6.35% to $3.35
• Paladin Energy added 5.13% to $11.32
• Deep Yellow climbed 5.13% to $1.43

Consumer discretionary stocks

Consumer discretionary stocks surged on the prospects of an interest rate cut before year-end following the cooler inflation data.

• Temple & Webster surged 3.57% to $13.04
• Baby Bunting stormed 4.10% higher to $1.66
• JB Hi-Fi gained 3.00% to $80.94
• Nick Scali added 2.71% to $16.31

Banking sector

The big banks snapped their recent losing streak.

• Macquarie added 1.90% to $232.48
• NAB added 0.71% to $37.74
• ANZ climbed 0.15% to $30.82
• CBA edged 0.08% higher to $135.01

IT stocks

Following a positive lead from the Nasdaq on Wall Street overnight, local IT stocks rose.

• Novonix skyrocketed 13.96% to $0.63
• DroneShield surged 8.16% to $1.32
• ZIP soared 6% to $2.82, its highest since February 2022
• EML Payments added 4.8% to $0.66

ASX 200 technical analysis

Last week, the ASX 200 ran head-on into our band of daily and weekly trend channel resistance at around 8230/8250 before pulling back this week into support at 8120/8000, coming from the early September high.

Provided the ASX 200 continues to hold above support at 8120/8000, we can expect a retest and potential break of resistance at 8250. Aware that a loss of support at 8120/8000 would indicate a deeper pullback towards 7900 is underway.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 26 September 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.}