ASX 200 afternoon report: 5 March 2024

The ASX 200 trades 4 points (-0.05%) lower at 7731 at 3.00pm AEDT.

A cagey session today for the ASX 200, with neither the bulls nor the bears willing to stamp their authority on proceedings ahead of tomorrow's Q4 2023 Australian GDP data.

The release of the final partial inputs into the national accounts (GDP) this week has been a mixed bag. A heavy fall in business inventories in the fourth quarter (-1.7% vs 0.2% exp) has been countered by a stronger-than-expected rise in company profits (+7.4% vs 1.6% exp) and net exports (+0.6% vs 0.2% exp).

This leaves the market looking for a rise of 0.2% for GDP in the December quarter, for an annual rate of just 1.5%, providing further evidence that economic activity has slowed in response to higher interest rates.

We continue to think that softer inflation, cooling labour markets, slower growth and household spending will see the RBA remove its tightening bias in June before cutting rates by 25bp in August and again in November 2024.

Today’s key economic event

The Chinese National People's Congress (NPC) underway in Beijing has rubber-stamped an economic growth target of "around five per cent" for 2024, the same growth target as 2023. It won't move the dial on the outlook for the Chinese economy, which remains tepid by historical standards.

Nonetheless, the initial response to the NPC from the China complex has been positive, with the Chinese stock market, the CSI300, rising by 0.5% and the price of iron ore futures on the Dalian futures exchange gaining by 0.9%.

ASX 200 stocks

Mining sector

• Fortescue: +1.77% to $25.81
• Rio Tinto: +1.24% to $124.94
• BHP: +1.04% to $44.68

Lithium sector

A promising rebound in Lithium stocks has been cut short after US lithium heavyweight Albermarle announced overnight it was looking to raise more than $ US2.1 billion to replenish its coffers against the downturn in lithium prices.

• Pilbara Minerals: - 7% to $4.09c
• IGO: -5.39% to $7.72
• Ilika Resources: -4.36% to $6.80
• Liontown: -4.32% to $1.27

Banking sector

• NAB: -0.40 % to $34.01
• Macquarie: -0.22% to $192.37
• Westpac: -0.07% to $26.65
• ANZ: - 0.07% to $28.78
• The share price of CBA has slipped by -0.65% to $117.38 after earlier in the session trading to a fresh record high of $118.70

Gold sector

The gold miners have continued their resurgence after the price of gold struck a three-month high overnight of $2019.

• Regis Resources: +5.45% to $2.02
• Silver Lake Resources: + 4.5% to $1.16
• Evolution Mining: +2.43% to $3.17
• Northern Star Resources: +2.5% to $14.06

ASX 200 technical analysis

Our technical view has been that the decline from the early February 7703 high to the mid-February 7489 was a correction to be followed by new highs, which played out well. From here, the ASX 200 needs to see a sustained break above multiyear trend line resistance at 7775ish to open up a move towards 7900/8000.

ASX 200 daily chart

• ^{Source: TradingView. The figures stated are as of 5 March 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.}