ASX 200 afternoon report: 23 January 2025

The ASX 200 trades 51 points (-0.61%) lower at 8378 as of 2.30pm AEDT.

Tech sector’s brief rally overshadowed

The ASX 200 has fallen today, snapping a three-day winning streak that brought it to within 84 points of its record high of 8415.5 from early December. Today's decline came despite a strong session on Wall Street, especially among tech stocks, following US President Donald Trump's announcement of major spending plans on artificial intelligence (AI) infrastructure.

Although the ASX 200 IT sector has mirrored the overnight rally on Wall Street, the local IT sector, which only constitutes a small weighting within the ASX 200, has seen its gains overshadowed by declines in major mining and banking stocks.

The weakness in mining stocks is attributed to Trump's mention of a 10% tariff on China yesterday, after initially excluding China from tariff measures during Tuesday’s inauguration.

Earlier in the week, legendary investor Stanley Druckenmiller noted that the optimism surrounding Trump’s presidency and pro-business policies is energising the markets and corporate CEOs. It is that energy that has helped the big banks regain most of December’s losses.

Interest rate cut on the horizon?

The countdown has begun to next week's crucial Australian Q4 CPI reading, which will determine whether the RBA will cut interest rates for the first time since November 2020 or maintain the current cash rate of 4.35%. Expectations are that headline inflation will increase by 0.5% QoQ, resulting in an annual rate of 2.2%. The more significant core measure, the Trimmed Mean, is anticipated to rise by 0.6% QoQ, bringing the annual rate of Trimmed Mean inflation down to 3.3%.

The Australian interest rate market is optimistic that inflation figures aligning with these expectations will see the RBA cut rates by 25 basis points (bp) to 4.10% in February. However, there still remains an element of doubt due to ongoing resilience in the Australian labour market which has perhaps prompted some profit-taking in consumer-facing stocks.

ASX 200 stocks

Mining sector

The mining sector faced significant downturns amidst tariff concerns.

• Mineral Resources dropped 2.60% to $35.61
• Fortescue slipped 2.18% to $18.61
• BHP fell 1.66% to $39.14
• Rio declined 1.40% to $117.94

Banking sector

Today, the banks experienced a round of profit-taking.

• Westpac dropped 0.33% to $32.87
• NAB decreased 0.33% to $39.13
• CBA fell 0.32% to $157.24
• ANZ declined by 0.26% to $30.14

Consumer discretionary sector

• Baby Bunting fell 3.24% to $1.79
• JB Hi-Fi lost 2.24% to $98.40
• Super Retail group fell 2% to $15.19
• Premier Investments lost 1.6% to $26.62

ASX 200 technical analysis

In our last update before our break, we said that if the ASX 200 remained above trend channel support and the support provided by the 200-day moving average at the 8000/7980 area, there was the potential for the ASX 200 to retest the 8514 high and the top of its long-standing trend channel resistance. This remains our base case, with the top of the trend channel now 100 points higher at around 8620.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 23 January 2025. 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.}