ASX 200 afternoon report: 20 February 2025

The ASX 200 trades 116 points (1.39%) lower at 8302 as of 3.00pm (AEDT)

Bank earnings trigger market rout

The ASX 200 has dived to a five-week low of 8278, almost 4% below last Friday's 8615 record high, with this earnings season likely to be remembered for all the wrong reasons.

The ASX 200 Financial Sector last experienced a similar dramatic decline in early August 2024, when a hawkish Bank of Japan policy meeting triggered a 15% single-day collapse in the Nikkei 225 Index, sparking a broader selloff across Asian equity markets.

While August's banking sector weakness stemmed from external factors, the current decline reflects domestic concerns - particularly crowded positioning and elevated valuations that leave no margin for earnings disappointment.

Economic data and technical outlook

In economic news, today’s labour market update showed that the job market remains solid. The Australian economy added 44,000 new jobs in January, while the unemployment rate rose to 4.1% from 4% as the participation rate reached a record high of 67.3%. Should the March quarter inflation numbers, set to be released on 30 April, confirm the ongoing disinflationary trend, we expect the RBA to deliver a follow-up 25 basis point rate cut at its meeting in May.

ASX 200 reporting season

Iron ore giants face downturn

The giant iron ore miners have also contributed to today's earnings gloom. Mineral Resources' 20% fall yesterday, following its earnings report, put fellow mining giants Rio Tinto and Fortescue under the spotlight today.

Rio Tinto's share price dropped 2.39% to $119.10 after reporting a 1% decline in revenues to US$53.7 billion and a 2% decrease in underlying EBITDA to US$23.3 billion for the 12 months ending 31 December.

Fortescue's share price plummeted 7.35% to $18.02 after revealing a 20% year-on-year revenue decline to US$7.6 billion, with EBITDA falling 38% to US$3.6 billion.

Telstra shines amid the gloom

However, it hasn't been all doom and gloom. Telstra reported a 1.5% increase in revenue to $11.6 billion and a 7.1% rise in net profit after tax (NPAT) to $1.1 billion for the first half of the year. It also announced a 9.5-cent dividend per share and a $750 million share buyback, driving its share price to an 18-month high of $4.15.

ASX 200 stocks

Financial sector

The financial sector leads the market lower, tumbling 7.7% from last week's record high of 9322.5.

• NAB dropped 4.37% to $34.71
• Westpac fell 3.94% to $30.93
• ANZ declined 3.42% to $29.10
• CBA slipped 1.80% to $156.08

Mining sector

Major miners face pressure following disappointing earnings results.

• Mineral Resources plunged 20% after its earnings update
• Rio Tinto fell 2.39% to $119.10 following softer full-year results
• Fortescue tumbled 7.35% to $18.02 after reporting declining revenues

ASX 200 technical analysis

The ASX 200 has broken below critical support at 8350/60, breaching both the uptrend from December's 6051 low and horizontal support at 8353. This technical damage suggests further downside risk toward the 8150/00 zone, where both the 200-day moving average and trend channel support converge.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 20 February 2025. 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.}