ASX 200 afternoon report: April 5, 2023
ASX 200 market update as of April 5, 3.15pm AEST.
The ASX 200 trades 5 points lower (-0.07%) at 7232 at 3.15pm AEST.
After rising for each of the past seven trading sessions, the ASX 200 has paused for breath today, perhaps mindful of the saying, "When Wall Street sneezes – we catch a cold."
Overnight US Job Openings, a reliable indicator of labour market demand, fell 6% in February, just a day after the ISM Manufacturing PMI decreased to 46.3 in March, representing a fifth month of contraction in US factory activity.
Fuelling US slow-down fears overnight, a warning from JP Morgan CEO Jamie Dimon that the impact of the banking crisis would be felt for years to come.
Of course, when it rains, it pours
The weaker economic data follows the weekend's surprise cut to production by OPEC. The price of crude oil is today trading above $81.00 - 25% above its $64.36 low of just two weeks ago. If sustained, it provides the double whammy of a hit to growth and higher inflation.
All of which vindicates the RBA's decision to keep rates on hold yesterday at 3.60% and RBA Governor Lowes's comment at a speech today that "it’s plausible that rates don’t need to go up as much of the rest of the world, but that could change.”
Health Care sector
Reflecting the more cautious mood, the defensive Health Care Sector has been the day’s best-performing sector.
- Telix Pharmaceuticals added 4.8% to $7.43
- CSL added 1.36% to $295.48
- ResMed added 1.12% to $32.91
- Sonic Healthcare added 0.7% to $36.15.
Gold sector
Gold screamed higher overnight to close at $2020 (+1.82%), its highest close in 12 months after US yields and the US dollar eased following the softer economic data. ASX200 listed miners responding positively.
- Regis Resources added 5.9% to $2.15
- Gold Road added 4.2% to $1.81
- Evolution Mining added 3.57% to $3.33
- Northern Star added 3.5% to $13.05.
Energy sector
Crude oil at $81.00 p/b is eyeing a solid band of technical resistance in the $82/83.00 region, critical to the future direction of crude oil prices, prompting some profit-taking in the energy sector.
- Woodside Energy fell 1.18% to $34.01
- Santos fell 0.95% to $7.12
- Beach Energy fell 0.83% to $1.50.
Banking sector
It was a mixed day for the big four banks.
ANZ gained 0.34% to $23.35
CBA added 0.28% to $99.25
NAB fell 0.7% to $27.88
Westpac fell 0.05% to $21.79.
Coal sector
Elsewhere, the big miners have fallen as the price of iron ore consolidates below $120 p/t on economic uncertainty.
ASX 200 technical analysis
After rallying over 5% over the past two weeks from its 6895 low, the ASX 200 is starting to look a little tired, suggesting a retracement is likely in the short term.
Nonetheless, providing the ASX 200 remains above support at 6900, we look for it to rally towards resistance 7350/70 area into the end of April.
ASX 200 daily chart
- TradingView: the figures stated are as of April 5th, 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.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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