ASX 200 afternoon report: 05 October 2023

The ASX 200 trades 37 points (0.43%) higher at 6928 at 2.20 pm AEDT.

ASX 200 sees positive turn amid Wall Street relief rally

The ASX 200 is on track for its first positive session this week and in October, following a relief rally on Wall Street as US yields eased following the release of cooler-than-expected US economic data.

Much has been written about the unrelenting rise in long-term US interest rates, threatening prospects of a soft landing and raising doubts around equity market valuations. A move was stopped in its tracks overnight following the release of considerably weaker ADP employment data, and the ISM Services PMI, topped off by a 5.6% fall in the price of crude oil to below $85.00 per barrel.

Tech stocks continue to shine

Of course, the current sense of calm can quickly be undone by the release of a hotter-than-expected Non-Farm Payrolls report in the US on Friday. However, in the meantime, there was no stopping tech stock pack leaders like Tesla, Google, and Amazon from enjoying a moment in the sun.

The ASX 200 market movements today

Property sector

Turning to the local market, the much-maligned ASX 200 property sector which was down over 11% in the past five weeks, performed well today.

• Vicinity Centres gained 3.29% to $1.73
• Goodman Group added 2.5% to $21.74
• GPT added 2.14% to $3.82
• Dexus gained 2.1% to $3.82

IT sector

A similar story unfolded for the interest rate-sensitive ASX 200 tech sector as it embarked on a journey to regain lost ground.

• Appen gained 2% to $1.14
• NextDC added 2% to $12.32
• Tyro Payments added 1.71% to $1.33
• Seek gained 1.7% to $21.73

Banking sector

The big banks were eager to stamp approval on the pullback in yields.

• Westpac gained 1.3% to $21.00
• Macquarie added 1.1% to $165.20
• ANZ gained 0.76% to $25.11
• CBA gained 0.7% to $98.78

Mining sector

The major iron ore miners are still constrained by concerns about the Chinese economy. As the market prepares for China's upcoming CPI report, which is anticipated to reveal persistently subdued inflation in the world's second-largest economy, apprehensions persist.

• Mineral Resources fell 2.34% to $61.85
• Rio Tinto fell 1.17% to $112.29
• BHP fell 0.57% to $43.47
• Fortescue fell 0.29% to $20.72

Lithium sector

Lithium stocks have been impacted today due to a downgrade from a US broker, who expressed concerns about declining lithium prices.

• Galan Lithium, dived 4.1% to $0.59c
• Core Lithium fell 4.43% to $0.38c
• Vulcan Energy fell 3.87% to $2.73
• IGO fell 3.24% to $11.66.

ASX 200 technical analysis

Last week, we turned tactically bullish on the ASX 200 (just above 7000), anticipating a rebound toward the range highs (7440) and possibly the year-to-date highs (7567). Stop levels for the bullish view are a sustained close below 6900/70. We are aware that if the ASX 200 sees a sustained close below 6900/70, the risks include a test of 6750 before reaching the 2022 lows at 6400.

ASX 200 daily chart

• _{TradingView: the figures stated are as of October 05, 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.}