ASX 200 afternoon report: 30 April 2024

The ASX 200 trades 11 points (0.23%) higher at 7649 at 2.20pm AEST.

The ASX 200 is poised to secure a second day of gains, supported by gains on Wall Street and a weaker-than-expected retail sales report for April, which threw cold water on calls for RBA rate hikes.

Retail sales fell by 0.4% in April, reversing a downwardly revised 0.2% rise in March. Over the past year, retail sales have increased by only 0.8%, the lowest annual growth rate in 24 years. Ben Dorber, ABS head of retail statistics, said: "Consumers pulled back on retail spending in March as cost of living pressures remained high.

Underlying retail turnover has been flat for the past six months and was up only 0.8 per cent compared to March 2023. Outside of the pandemic period and introduction of the GST, this is the weakest growth on record when comparing turnover to the same time in the previous year."

The soft retail sales data fits our view that last week's firmer inflation data has only delayed the first RBA rate cut from August until November, and that rate hikes are unlikely.

China's PMI data signals strengthening economic recovery

Turning to China, PMI data released today showed that China's factory activity expanded for a second month, proving that the recovery in the Chinese economy is gaining traction. The official manufacturing PMI eased to 50.4 in April from the March 12-month high of 50.8, while the Caixin manufacturing PMI rose to 51.4 in April from 51.1 in March.

ASX 200 stocks

Mining sector

Evidence of expansion in China has supported the big miners.

• FMG: + 1.77% to $26.12
• Mineral Resources: + 1% to $72.12
• BHP: + 0.45% to $43.16
• Rio Tinto: + 0.27% to $131.34

Banking sector

The big banks have gained ahead of trading updates from NAB (half year) on 2 May, followed by Macquarie (full year) on the 3rd, Westpac (half year) on the 6th, and ANZ (half year) on 7th of May.

• Westpac: + 0.35% to $28.85
• CBA: + 0.21% to $114.05
• ANZ: + 0.05% to $28.10
• Macquarie: - 0.2% to $187.23

Real estate sector

After a 10% fall in April, the interest rate-sensitive real estate sector has found support into the end of the month.

• Vicinity Centres: + 1.2% to $1.92
• Scentre: + 1.2% to $3.19
• Goodman Group: + 0.8% to $31.44
• GPT: + 0.72% to $4.22

ASX 200 technical analysis

As we have noted in recent reports, a 3-5% pullback is very common for the ASX 200 in early May. The big question is, was it pulled forward into April, or does the traditional May pullback still lie ahead?

We prefer the latter due to the mixed signs of bottoming at the recent 7492 low. As such, we view the current bounce as a B wave before the ASX 200 commences another leg lower (Wave C of an ABC correction) towards the 200-day moving average at 7360ish.

ASX 200 daily chart

• ^{Source TradingView. The figures stated are as of 30 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.}