ASX 200 afternoon report: 2 April 2024

The ASX 200 trades 22 points (-0.28%) lower at 7874 at 3.20pm AEDT.

The ASX 200 has reversed lower this afternoon, retreating from the fresh record high of 7910.5, it struck this morning after trading resumed from the Easter mini break.

Headwinds from Wall Street drove the reversal, as robust US manufacturing data sent yields surging and dampened expectations that the Federal Reserve would cut interest rates in June.

Ahead of Friday night’s all-important Non-farm payrolls report, the risks appear to be for a firmer jobs report, which would likely see the market wave goodbye to expectations of a Fed rate cut in June. Consensus expectations are for the US economy to add 200k jobs in March and for the unemployment rate to hold steady at 3.9%.

Locally, the minutes from the RBA’s board meeting in March revealed that for the first time in nearly two years, the RBA did not consider raising rates. The board noted that GDP was below its historical average, consumption was weak, and inflation was returning to target.

“Members agreed that leaving the cash rate target unchanged at this meeting was the best way to achieve the board’s strategy of supporting a gradual return of inflation to target and the labour market to full employment", it said.

ASX 200 stocks

Iron ore stocks

Following a 28.5% fall during the first quarter of 2024, a rebound in iron ore futures above $100 today has supported most big mining stocks.

• BHP: +1.81% to $45.07
• Rio Tinto: +0.71% to $122.63
• Mineral Resources: + 0.54% to $71.18
• Fortescue: - 1% to $25.44

Energy sector

Stronger-than-expected Chinese and US manufacturing data have boosted the price of crude oil above $84.00 for the first time in five months.

• AGL Energy: +1.38% to $8.46
• Santos: + 0.9% to $7.82
• Beach Energy: + 0.41% to $1.84
• Woodside: + 0.23% to $30.57

Mining sector

ASX-listed gold miners surged after the gold price hit a fresh record high of $2265 overnight.

• Evolution Mining: + 5.17% to $3.77
• Gold Road Resources: +5.22% to $1.66
• Silver Lake Resources: +2.62% to $1.27
• Northern Star Resources: + 2.2% to $14.79

Banking sector

Higher bond yields have weighed on the big banks.

• Macquarie: - 0.69% to $198.32
• CBA: -0.42% to 119.83
• Westpac: -0.3% to $26.02
• ANZ: -0.2% to $29.34
• NAB: + 0.06% to $34.66

ASX 200 technical analysis

Providing the ASX 200 remains above uptrend support at 7700 (from the October 6751 low), we expect it to extend gains towards 7950/8000. However, for active traders, given that the risk-reward of holding longs is deteriorating after its strong run higher and based on signs of bearish RSI divergence, we suggest reducing long positions during the first half of April ahead of a likely pullback in late April/early May.

ASX 200 daily chart

• ^{Source: TradingView. The figures stated are as of 2 April 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.}