ASX 200 afternoon report: April 3, 2023

The ASX 200 trades 34 points higher (0.48%) at 7212 at 3.15 pm.

The ASX 200 has started April in the same buoyant mood that it ended March, led by strong gains in the Energy Sector after OPEC+ announced a surprise cut to oil production.

Energy sector

The announcement of a total production cut of over 1 million barrels per day in May spurred the price of crude oil 8% higher this morning to above $81.00 per barrel, building on its 9.25% gain last week.

• Beach Energy added 4.95% to $1.49
• Woodside Energy added 2.82% to $34.28
• Santos climbed 2.46% to $7.07.

Last quarter the Nasdaq soared an incredible 20%, its best quarter since 2020, as the interest rate market flipped from expecting rate hikes to rate cuts courtesy of the banking crisis.

IT stocks

Taking advantage of the tech tailwind from offshore, it’s been a good day for local IT names.

• Tyro Payments added 7.2% to $1.54
• Novonix added 5.1% to $1.33
• Megaport added 4.85% to $4.32
• Sezzle added 4.67% to $0.79c.

Banking sector

The Reserve Bank Board of Australia meets tomorrow at 2.30 pm to discuss the next move or possible lack of movement in the RBA’s official cash rate. The interest rate market is confident that the RBA will pause its rate hiking cycle at 3.60%.

However, the forecasting community is evenly divided between those expecting a pause and those expecting another 25bp rate hike to 3.85%. You can read our thoughts on tomorrow’s RBA here.

The big four banks extended last week’s rally led by ANZ.

• ANZ gained 1.57% to $23.29
• Westpac added 1.32% to $21.95
• CBA added 1.22% to $99.51
• NAB gained 0.63% to $27.90.

Lithium stocks

It was a mixed day for Lithium stocks as Lake Resources added 10.11% to $0.49c after reporting independent testing showed its lithium carbonate produced from its Kachi Operation in Argentina has grades and purity in excess of 99.8%.

Meanwhile, a U.S. investment bank has downgraded its Lithium price forecasts which weighed on other Lithium names.

• Galan Lithium fell 3.67% to $1.05
• Pilbara Minerals fell 3.3% to $3.81
• Allkem fell 1.77% to $11.67.

Coal sector

A fall in China’s March Caixin manufacturing PMI, to 50.0 vs 51.7 expected, has weighed on the big miners.

• Fortescue fell 2% to $22.04
• Rio Tinto fell 1.36% to $118.54
• BHP fell 1.23% to $46.65.

ASX 200 technical analysis

Last week’s rebound in the ASX 200 aligns with our view that the ASX 200 has been looking for a low. Providing it continues to hold above support at 6900, the pullback from the February 7567 high is viewed as a countertrend (an "ABC" Elliott Wave correction), and we look towards resistance 7350/70 area (March highs).

ASX 200 daily chart

1. TradingView: the figures stated are as of April 3rd, 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