ASX 200 afternoon report: 3 September 2024

The ASX 200 trades 14 points (-0.18%) lower at 8095 at 2.30pm AEST.

ASX 200 eases amid Wall Street closure and RBA criticism

The ASX 200 eased today in the absence of a positive lead from Wall Street, which was closed for the Labor Day public holiday. Additionally, Federal Treasurer Jim Chalmers's critique of the Reserve Bank of Australia (RBA) yesterday cast a shadow over the market.

In anticipation of a soft Q2 gross domestic product (GDP) print tomorrow, Treasurer Chalmers stated that the RBA’s interest rate rises were “smashing the economy.”

GDP quarterly performance

For the March quarter, GDP rose by 0.1% quarter-on-quarter (QoQ), resulting in an annual growth rate of 1.1% year-on-year (YoY). Though this marked the tenth consecutive increase in quarterly GDP, it was the slowest pace of growth in six quarters.

For the June quarter, the market is expecting a rise of 0.3% QoQ, which would bring the annual rate down to 1.0% YoY, slightly above the RBA’s forecast of 0.9% YoY.

Slowing economic growth

Over the past decade, Australia’s economy has grown at an average rate of 2.4% YoY. The current sluggish pace is a side effect of the RBA’s restrictive monetary policy aimed at rebalancing supply and demand to curb persistent inflation. The imbalance and higher interest rates are partly due to stimulatory federal government budgets.

The RBA forecasts GDP to rebound to 1.7% YoY by the December quarter of this year. However, given the current slow growth and persistent inflation, it's uncertain where the rebound will come from unless the RBA implements pre-emptive rate cuts.

ASX 200 stocks

Consumer staples sector

The consumer staples sector fell as Coles and Woolworths trade ex-dividend.

• Woolworths lost 3.13% to $34.68
• Coles fell 2.24% to $18.52

Consumer discretionary sector

• Wesfarmers fell 1.12% to $71.46 after also going ex-dividend

Mining sector

A 2.3% drop in iron ore futures to $94.60 in the Asian session has exerted pressure on the major mining stocks.

• Mineral Resources fell 5.16% to $37.45
• Rio Tinto slipped 1.66% to $108.12
• Fortescue was down 1.3% to $17.94
• BHP lost 0.81% to $40.05

Financial sector

The ASX 200 financial sector has extended its impressive run, hitting a new record high of 8369, marking an impressive rise of over 11.70% from its August low of 7487. In comparison, the broader ASX 200 index has climbed a mere 6.2% from its August low.

• Macquarie added 1.40% to $220.07
• Commonwealth Bank of Australia (CBA) advanced 0.71% to $142.78 after setting a new intraday record high of $142.85
• Australia and New Zealand Banking Group (ANZ) increased by 0.55% to $30.83
• National Australia Bank (NAB) rose 0.43% to $38.81
• Westpac edged up 0.33% to $31.70

ASX 200 technical analysis

The focus remains on the topside for the ASX 200, which is trading just 53 points below its record high of 8148 from early August. Above this high is trend-channel resistance level at 8180, which is expected to hold at least initially.

On the downside, initial support level is viewed at 7850, with further support at the 200-day moving average around 7680.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 3 September 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.}