ASX 200 afternoon report: 23rd of March 2023

The ASX 200 trades 48 points lower (-0.68%) at 6967 at 3.30pm.

The ASX 200's two-day winning streak has ended abruptly today, taking its lead from a dive on Wall Street following this morning's FOMC meeting.

While the Fed raised rates by 25bps to 4.75%-5.00% and left the median dot unchanged at 5.125% - a dovish development relative to expectations a few weeks ago, the tone of the press conference had hawkish elements. Fed Chair Powell noted he doesn't "see rate cuts this year" and that the Fed is "committed to restoring price stability."

Risk sentiment soured further after Treasury Secretary Janet Yellen said that the government is not considering "blanket" deposit insurance across the banking system, contradicting earlier reports—an explosive mix of communique with wounds still fresh after recent banking stress.

Coal sector

Banking crises are considered deflationary and, amongst other things, create uncertainty for commodity prices, including iron ore.

• Fortescue fell 2.62% to $20.48
• Mineral Resources fell 2.53% to $77.03
• South32 fell 2.16% to $4.07
• Rio Tinto fell 0.95% to $114.35
• BHP fell 0.7% to $43.54.

Banking sector

The glimpse of survival handed to First Republic Bank snatched away as it fell 15.57% overnight, outpaced by a 17.12% fall in fellow U.S regional lender Pac West Bancorp.

• Macquarie Bank fell 1.65% to $171.25
• Bank of Queensland fell 0.9% to $6.51
• NAB fell 0.86% to $27.81
• ANZ fell 0.5% to $22.74.

IT stocks

IT stocks on the outer after the tech-heavy Nasdaq cratered 1.4% overnight.

• Megaport fell 7.4% to $4.13
• Afterpay owner Block fell 5.4% to $108.95
• Zip fell 3.9% to $0.49c
• EML Payments fell 2.4% to $1.36.

Lithium stocks

A sea of red for ASX listed Lithium names, including fresh cycle lows for Pilbara Resources, which fell 4% to $3.46.

• Core Lithium fell 3.8% to $0.76c
• Lake Resources fell 7.1% to $0.467c
• Galan Lithium fell 6.53%.

Mining sector

Providing itself time and again a reliable safe haven, the price of gold climbed 1.7% to $1970.

• Perseus Mining added 2.51% to $2.25
• Evolution Mining added 2.5% to $2.88
• Northern Star added 2% to $11.45
• Regis Resources added 1.4% to $1.82.
  

ASX 200 technical analysis

Providing the ASX 200 continues to hold above support 6910/00, the pullback from the February 7567 high is viewed as a countertrend (an "ABC" Elliott Wave correction), and a rebound is expected to follow. Aware that should the ASX 200 see a sustained break below support at 6910/00, it would negate our positive bias and warn of a retest of the bottom of its 12-month range at 6410.

The AUD/USD trades at .6730, eying a band of solid resistance at .6765/85 that it needs to reclaim on a sustained basis to negate downside risks.

ASX 200 daily chart

1. TradingView: the figures stated are as of March 23rd, 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.