ASX 200 afternoon report: 30 July 2024

The ASX 200 trades 40 points (-0.51%) lower at 7949 at 2.30pm AEST.

Fortescue shares take a hit

The ASX 200 declined today, influenced by cautious market sentiment ahead of a data-rich global calendar and a significant transaction involving Fortescue shares traded at a substantial discount, impacting the index.

Market analysts suggest that the seller of the $1.9 billion parcel of Fortescue shares is likely to be an ESG-focused fund, forced to sell down its shareholding following Fortescue's decision to slow its push into green hydrogen.

Inflation data looms, RBA decision awaited

Tomorrow's Q2 2024 Australian inflation update will be pivotal in determining whether the Reserve Bank of Australia (RBA) will raise rates before year-end or stay on hold at 4.35%. The expectation is for headline inflation to rise by 1% quarter-on-quarter (QoQ) for an annual rate of 3.8%. Trimmed mean is expected to rise by 1% QoQ, which would see the annual rate of trimmed mean inflation remain at 4.0% year-on-year (YoY), above the RBA's forecast for June of 3.8%.

While we think the RBA will be willing to look through a warm print tomorrow of 0.9% - 1.1% QoQ for trimmed mean, a "red hot" print of 1.2% or higher would put intense pressure on the RBA to raise rates again. Ahead of the release, the Australian interest rates market is pricing in 6 basis point (bp) or a 23% chance of a 25 bp rate hike at next week's RBA Board Meeting.

ASX 200 stocks

Mining sector

• Fortescue's shares dived 9.07% to $18.50
• Mineral Resources fell 3.29% to $52.22
• BHP lost 1.12% to $41.60
• Rio Tinto fell 0.56% to $115.22

Banking sector

• CBA gained 0.35% to $135.38, a fresh record high
• Westpac added 0.02% to $29.99
• Macquarie slipped -0.01% to $207.14
• ANZ fell 0.99% to $28.53

Energy sector

Concerns around energy demand in China saw crude oil fall 0.59% during the Asian time zone to $75.36, its lowest level in seven weeks.

• Viva Energy fell 2.16% to $3.17
• Beach Energy lost 1.56% to $1.41
• Woodside Energy lost 1.36% to $26.77
• Santos lost 1.28% to $7.74

IT stocks

This week sees four of the "magnificent 7" report Q2 2024 earnings in the US starting with Microsoft tomorrow morning. Local IT stocks, still bruised after last week's tumble, elected to take no chances.

• DroneSheild lost 6.12% to $1.38
• Megaport fell 3.12% to $10.57
• Humm Group lost 3.30% to $0.44
• Wisetech Global fell 2.21% to $93.35

ASX 200 technical analysis

Last week, the ASX 200 tested and successfully held the 7900/7850 support region, which keeps in place the uptrend and prospects of a retest and break of the 8,083 record high. A sustained break below 7900/7850 would indicate that the recent break higher has failed and opens the way for a deeper pullback initially to 7700.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 30 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.}