ASX 200 afternoon report: May 16, 2023

The ASX 200 trades 29 points (-0.40%) lower at 7238 at 3.15 pm AEST.

The ASX 200 trades 29 points lower at 72438, reversing lower from an intraday high of 7278.9 following another round of soft economic data in China and Australia.

Last week, Chinese economic data surprised the downside across inflation, imports, and bank lending. A theme viewed again today as activity data for April disappointed.

Retail sales increased by 18.4% YoY vs the 21% expected. Industrial production increased by 5.6% vs the 10.9% expected, and Fixed asset investment increased by 4.7% vs the 5.5% expected.

Recent Chinese data has reinforced the idea of an even recovery in the Chinese economy and dampened the outlook for Australia’s leading trading partner.

Not good news for the ASX 200, already on edge after the Westpac Consumer Confidence index plunged by 7.9% to 79, the lowest level since April 2020. The culprit was the RBA’s unexpected rate hike and a disappointing budget which has sapped household confidence.

The release of the RBA meeting minutes this morning highlights the risk of more rate hikes to come.

Consumer-facing stocks

Consumer-facing stocks unsurprisingly wore the brunt of the selling.

• Nick Scali fell 2.74% to $9.58
• Metcash fell 2.16% to $3.85
• Star Entertainment fell 2% to $1.24
• Treasury Wine Estates fell 1.5% to $13.09
• Super Retail Group fell 1.3% to $12.66.

IT stocks

IT stocks have fallen, led by EML payments.

• EML payments fell 3.76% to $0.64c
• Altium fell 1.82% to $36.33
• Tyro Payments fell 1.66% to $1.49
• Xero fell 1.54% to $92.82.

Banking sector

A mixed day for the big banks.

• CBA fell 0.7% to $97.81
• NAB gained 0.76% to $26.66
• ANZ gained 0.34% to $23.61
• Westpac gained 0.35% to $21.21.

Coal sector

A similar story for the miners.

• Mineral Resources fell 0.6% to $73.30
• Fortescue fell 0.44% to $20.28
• Rio traded flat at $108.90
• BHP gained 0.62% to $44.12.

Lithium sector

A breather today for the Lithium sector after its phenomenal run higher.

• IGO added 1.3% to $14.86
• Pilbara Minerals added 1.27% to $4.79
• Core Lithium gained 0.85% to $1.18.

In other news, James Hardies surged 8.15% to $36.76 after it forecast a larger profit for the first quarter of 2024 and Pointsbet Holdings fell 9.28% to $1.32, extending its decline, after it announced yesterday it would sell its US business for $US150 million.

ASX 200 technical analysis

After a frantic start to May, volatility in the ASX 200 has declined sharply over the past five sessions, with the most notable feature being dip buyers operating below 7250.

Below 7250, a strong layer of support between 7100 and 6900 comes from the 200-day moving average, uptrend support and year-to-date lows. On the topside, downtrend resistance comes in around 7335 from the February 7567 high.

ASX 200 daily chart

TradingView: the figures stated are as of May 16, 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.