ASX 200 afternoon report: July 13, 2023

The ASX 200 trades 110 points (1.55%) higher at 7246 at 2.45 pm AEST.

The ASX is on track to score its second “ton” this week, as global equity markets cheered the release of a softer-than-expected June CPI report. The annual headline inflation rate fell to 3.0% from 4% in May. More importantly, Core CPI eased to 4.8%YoY from 5.3%, the lowest rate since October 2021.

With the chest of the Fed now on the verge of crossing the finishing line to its most aggressive rate hiking cycle in four decades, today’s rally on the ASX has been led by the sectors best placed to benefit from an end to rate hikes.

Real estate sector

The ASX 200 Real Estate Sector advanced 2.4%.

• Lend Lease led the pack with a 4% increase to $8.21
• Goodman Group rose 3.6% to $20.49
• Domain Group grew 2.75% to $3.76
• Scentre added 2.4% to $2.75

IT sector

The IT sector improved by 2.2%

• EML Payments led with a 7.14% surge to $0.82c
• Megaport added 4.85% and is now up 47% in three days

Consumer discretionary stocks

• Myer increased 4.6% to $0.62c
• Nick Scali grew 3.22% to $9.94
• Domino’s added 2.7% to $48.57
• JB Hi-Fi increased 2% to $45.00

Banking sector

Last week’s storm in global bond markets has passed, with the yield on the Australian 10-year bond trading at 4.05% from last week’s high of 4.315%—good news for the big banks.

• Macquarie saw an increase of 2.25% to $180.29
• CBA rose 1.42% to $100.57
• Westpac added 1% to $21.42
• NAB gained 0.62% to $26.59

Gold miners

The soft US CPI print, which caused US bond yields and the US dollar to tumble, has had the opposite effect on gold trading above $1960 for the first in four weeks.

• Perseus Mining gained 10.2% to $1.84
• Evolution Mining increased by 7.05% to $3.65
• Silver Lake Resources added 6.5% to $1.19

Iron ore sector

• Rio Tinto grew 2.67% to $116.80
• BHP added 1.63% to $44.79
• Fortescue added 0.77% to $22.36

ASX 200 technical analysis

Turning to the charts, this week’s 3.5% rebound following last week’s brutal 4% sell-down has created a V-shaped bottom at the 6998 low. A V-shaped bottom is viewed as a bullish reversal pattern that should see the ASX 200 test the top of its three-month range at 7370/90. If the ASX 200 could see a sustained break above 7390, it would open a test of year-to-date highs at 7567.

ASX 200 daily chart

• _{TradingView: the figures stated are as of July 11, 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.}