ASX 200 afternoon report: 16 July 2024

The ASX 200 trades 15 points (-0.19%) lower at 8002 at 2.40pm AEST.

ASX 200 underthreat amid disappointing Chinese economic data

The historic three-day winning run, which saw the ASX 200 close above 8000 for the first time on Monday, is under threat, with the local bourse yet to spend a single minute of the day in positive territory.

The more cautious tone comes from yesterday's disappointing batch of Chinese economic data, which has weighed on commodity prices and the heavyweight ASX 200 materials sector.

ASX 200 stocks

Mining sector

The malaise was compounded by Rio Tinto's decision to greenlight the next stage of the massive Simandou iron ore project in Guinea. When the Simandou mine is fully operational in 2025, it is expected to produce about 120 million tonnes of iron ore.

• Rio Tinto fell 2.09% to $117.33
• BHP lost 1.53% to $42.99
• Fortescue edged 0.7% lower at $22.49

Consumer discretionary sector

The ASX 200 consumer discretionary sector is set to end its nine-day winning streak:

• Nick Scali lost 2.53% to $13.86
• Nick Scali fell 2.53% to $4.44
• Super Retail Group fell 1.53% to $14.20
• Adairs lost 0.93% to $1.85

IT sector

IT stocks have fallen due to expectations of a Fed rate cut in September ushering in rotation on Wall Street out of growth stocks and into small caps:

• Novonix fell 2.19% to $0.67
• Humm Group lost 2.13% to $0.46
• Xero lost 0.73% to $141.45
• Megaport fell 0.42% to $11.75

DroneShield has received a 'please explain' notice from the ASX after its share price dived 28.46% today to $1.86 on no obvious news. Today's sell-off is set to end a phenomenal eight-week winning streak for the counter-drone technology company, which saw its share price rally from $0.92 to a high of $2.72 earlier today.

Banking sector

It's been a mixed day for the big banks ahead of Thursday's June labour force report. The Australian interest rate market is now pricing in just 3 basis points (bp) of Reserve Bank of Australia (RBA) rate hikes before year-end, with RBA rate hike expectations continuing to cool after last week's dovish RBNZ meeting and softer US consumer price index (CPI) data:

• NAB added 0.51% to $37.44
• Westpac gained 0.20% to $28.16
• ANZ edged 0.15% higher to $29.86
• CBA slipped 0.26% to $132.33, consolidating ahead of yesterday's fresh record high of $133.30

ASX 200 technical analysis

Last week's break above 7910.5 confirmed that the ASX 200 had completed its corrective price action, a classic Elliott Wave 'ABCDE' type correction, and that the uptrend had resumed. Currently, the ASX 200 is testing weekly trend channel resistance at around 8000, which we expect to hold initially. We need to wait until Friday's close to ascertain whether the weekly level has been broken or held.

A sustained break above 8000 would open the way for a move to 8150.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 16 July 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.}