ASX 200 afternoon report: 8 August 2024

The ASX 200 trades 7 points (0.09%) lower at 7693 at 1.30pm AEST.

ASX 200 drops following volatile Wall Street session

The ASX 200 slipped today, following a jittery session on Wall Street, where key indices gave back early gains to close in negative territory.

Adding to the strain of nervous global markets, Reserve Bank of Australia (RBA) Governor Michele Bullock warned today that the RBA stands ready to raise rates to combat persistently high inflation, following up the hawkish messaging from Tuesday's RBA Board meeting.

Market scepticism towards RBA rate hikes

Despite the RBA's hawkish messaging, the local rates market is far from convinced that the RBA will follow through on its jawboning, with a complete 25 basis point rate cut almost fully priced before year-end.

Nonetheless, the RBA's hawkish bias does disadvantage the local stock market compared to its global counterparts, where central banks are either poised to ease or have already begun cutting rates.

ASX 200 stocks

Real estate stocks

The impact of higher interest rates was on display today as real estate stocks floundered, led by falls in Mirvac. The property developer reported a full-year loss of $805 million following falls in the value of its office portfolio and noted that higher costs were eroding margins.

• Mirvac dived 9.24% to $1.92
• Charter Hall fell 3.95% to $11.66
• Goodman fell 2.34% to $32.27
• GPT Group lost 2.28% to $4.49

Mining sector

The big miners lost ground after the iron ore price fell 1.53% to $99.40 in trading on the Singapore futures exchange.

• Mineral Resources fell 3.07% to $50.45
• BHP fell 2.24% to $40.10, its lowest price since November 2022
• Rio Tinto lost 2.13% to $114.13
• Fortescue fell 0.70% to $18.30

Energy sector

Crude oil gained 2.77% overnight to close at $75.23, supported by a larger-than-expected draw in US inventories and ongoing geopolitical tensions in the Middle East. Despite this, the ASX 200 energy sector has fallen.

• Woodside Energy fell 0.91% to $25.17
• Beach Energy fell 0.71% to $1.40
• Viva Energy lost 0.32% to $3.11

Banking sector

The big banks have gained with traders taking advantage of recent sharp falls to cover short positions or to open new long positions.

• NAB gained 1.25% to $35.17
• ANZ added 1% to $27.64
• Westpac added 0.62% to $27.79
• CBA gained 0.64% to $128.13

ASX 200 technical analysis

The rejection from last week's 8148 high left a weekly "loss of momentum" candle, like the one that warned of the recent pullback on Wall Street. Additionally, it occurred from the top of a weekly trend channel, which has contained the market for the better part of 22 months.

There remains a lack of solid evidence to support the idea that the ASX 200 or US equity indices have based. However, we note that the ASX 200 has a critical layer of support in the 7600/7500 area, including the 200-day moving average at 7581 and the April 7492 low. This provides a good level for investors to lean against if looking to add to longs, leaving room to add towards the lower bound of the weekly trend channel at 7000.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 8 August 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.}