​​​ASX 200 afternoon report: 2 November 2023

The ASX 200 trades 68 points (1%) higher at 6906 at 2.45 pm AEDT.

US bond market puts equity markets under pressure

For the past three months, soaring US bond yields have put equity markets under immense pressure, including our own ASX 200. A key driver of higher US bond yields has been lumpy bond issuance by the US Treasury to fund the US governments spending/deficits.

Overnight, the US Treasury announced that its funding requirements were not as large as initially thought (what's a lazy $76 BN between friends?). Combined with a dire US ISM manufacturing PMI (46.7 vs 49 expected) and a more cautious FOMC, the bond market vigilantes appear to have been sent packing for now, bringing relief to Wall Street.

Today's market movement

Tech sector

Encouraged by the Nasdaq's fourth day of gains and the rapidly improving outlook for risk sentiment, local tech stocks rebounded, led by Appen, which gained 8.33% to $0.97c.

• ZIP: + 6.67% to $0.32c
• Humm Group: +6.33% to $0.42c
• Sezzle: +5.45% to $14.90

Real estate sector

The interest rate sensitive ASX 200 real estate sector, which may have been caught in two minds between a hawkish RBA and a more cautious Fed, elected to side with the latter.

• Centuria Group: +5.96% to $1.25
• Charter Hall: + 4.91% to $9.41
• Real Estate Australia Group: + 4.32% to $151.39
• Domain: + 4.1% to $3.56

Financial sector

• ANZ: + 2.5% to $25.50
• Westpac: + 2.15% to $21.18
• NAB: + 2% to $28.72
• CBA: + 1.8% to $98.50

Macquarie which yesterday touched a 52-week low at $158.61, bounced 0.45% to $160.74.

Health sector

It was a better day for the Healthcare sector, which on Monday traded to within 1.5% of its March 2020 Covid Crash low.

• Resmed: + 4.1% to $23.66
• Ramsay: + 3.39% to $50.66
• Pro Medicus: + 2.14% to $80.08.
• Biotech giant CSL: + 1.54% to $238.64

Crude oil

Relief that Israel's operation in Gaza is yet to trigger a wider regional conflict saw crude oil overnight fall to just above $80 p/b – 10% below where it was trading just ten sessions ago.

• Santos: - 2.13% to $7.57
• Woodside Energy: - 1.64% to $34.14
• Viva Energy: - 0.35% to $2.84

Resource sector

Continued unwind of the geopolitical safe haven bid saw gold fall below $1980 overnight.

• Evolution Mining: - 1.95% to $3.52
• Northern Star Resources: - 1.81% to $11.68
• Perseus Mining: - 1.45% to $1.70
• Gold Road Resources: - 0.8% to $1.87

Origin Energy's largest shareholder, Australian Super, has rejected Brookfield and EIG's revised takeover offer of $9.53 per share, saying the offer is below their estimates of Origins value, which is thought to be closer to $10. Origins share price fell 6.39% to $8.49.

ASX 200 technical analysis

After its capitulation at the end of October, the ASX 200 needs to see a sustained close above resistance, formerly support at 6900/50ish to confirm a return to the safety of its previous 6900/7500 range and to provide a more positive technical backdrop.

ASX 200 daily chart

• _{TradingView: the figures stated are as of 2 November 2023. 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.}