ASX 200 afternoon report: April 5, 2023

The ASX 200 trades 5 points lower (-0.07%) at 7232 at 3.15pm AEST.

After rising for each of the past seven trading sessions, the ASX 200 has paused for breath today, perhaps mindful of the saying, "When Wall Street sneezes – we catch a cold."

Overnight US Job Openings, a reliable indicator of labour market demand, fell 6% in February, just a day after the ISM Manufacturing PMI decreased to 46.3 in March, representing a fifth month of contraction in US factory activity.

Fuelling US slow-down fears overnight, a warning from JP Morgan CEO Jamie Dimon that the impact of the banking crisis would be felt for years to come.

Of course, when it rains, it pours

The weaker economic data follows the weekend's surprise cut to production by OPEC. The price of crude oil is today trading above $81.00 - 25% above its $64.36 low of just two weeks ago. If sustained, it provides the double whammy of a hit to growth and higher inflation.

All of which vindicates the RBA's decision to keep rates on hold yesterday at 3.60% and RBA Governor Lowes's comment at a speech today that "it’s plausible that rates don’t need to go up as much of the rest of the world, but that could change.”

Health Care sector

Reflecting the more cautious mood, the defensive Health Care Sector has been the day’s best-performing sector.

• Telix Pharmaceuticals added 4.8% to $7.43
• CSL added 1.36% to $295.48
• ResMed added 1.12% to $32.91
• Sonic Healthcare added 0.7% to $36.15.

Gold sector

Gold screamed higher overnight to close at $2020 (+1.82%), its highest close in 12 months after US yields and the US dollar eased following the softer economic data. ASX200 listed miners responding positively.

• Regis Resources added 5.9% to $2.15
• Gold Road added 4.2% to $1.81
• Evolution Mining added 3.57% to $3.33
• Northern Star added 3.5% to $13.05.

Energy sector

Crude oil at $81.00 p/b is eyeing a solid band of technical resistance in the $82/83.00 region, critical to the future direction of crude oil prices, prompting some profit-taking in the energy sector.

• Woodside Energy fell 1.18% to $34.01
• Santos fell 0.95% to $7.12
• Beach Energy fell 0.83% to $1.50.

Banking sector

It was a mixed day for the big four banks.

ANZ gained 0.34% to $23.35
CBA added 0.28% to $99.25
NAB fell 0.7% to $27.88
Westpac fell 0.05% to $21.79.

Coal sector

Elsewhere, the big miners have fallen as the price of iron ore consolidates below $120 p/t on economic uncertainty.

• BHP fell 2.10% to $45.00
• Fortescue fell 1.87% to $21.48
• Rio Tinto fell 1.53% to $115.94.

ASX 200 technical analysis

After rallying over 5% over the past two weeks from its 6895 low, the ASX 200 is starting to look a little tired, suggesting a retracement is likely in the short term.

Nonetheless, providing the ASX 200 remains above support at 6900, we look for it to rally towards resistance 7350/70 area into the end of April.

ASX 200 daily chart

1. TradingView: the figures stated are as of April 5th, 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.