ASX 200 afternoon report: 6 June 2024

The ASX 200 trades 65 points (0.84%) higher at 7835 at 2.15pm AEST.

Market performance overview

Following a strong session on Wall Street overnight, the ASX 200 has experienced broad-based gains. At today's high of 7837, the index is just 1% below the record high of 7910.5 set in early April and 3% above the late May low of 7601.

The rally on Wall Street was driven by soft labour market data and a 25bp rate cut by the Bank of Canada. As we near Friday night's critical Non-Farm Payrolls release and key US inflation data next week, the US interest rate market is pricing in 50bp of rate cuts for 2024.

Domestic factors

Closer to home, yesterday's tepid Q1 2024 Australian GDP reading (1.1% YoY from 1.5% prior) has heightened expectations that the RBA will cut rates before year-end. Ahead of next week's Australian labour force update, the local rates market is pricing in a 36% chance of a 25bp RBA rate cut in December.

ASX 200 stocks

The interest rate-sensitive ASX 200 financial sector has surged 3% this week to a high of 7,550.8 this morning—less than seven points away from the 7556.9 record high set in November 2007 before falling 64% during the Global Financial Crisis.

Banking sector

The ASX 200 financial sector is up more than 12% in 2024, defying analysts who overwhelmingly have "sell" or "underweight" calls on the big banks.

• CBA: +1.73% to $125.64
• Macquarie: +1.38% to $195.87
• ANZ: +1.04% to $29.08
• Westpac: +0.84% to $26.98
• NAB: +0.19% to $34.87

IT sector

The IT sector has continued its momentum from May, gaining after AI chip maker Nvidia soared over 5% overnight to become the world's second most valuable stock.

• Zip: +6.58% to $1.21
• Wisetech Global: +2.35% to $99.75
• NEXTDC: +1.70% to $17.98
• Computershare: +1.31% to $27.03

Energy sector

Crude Oil closed higher overnight at $74.07 (+1.12%), rebounding from support in the low $70s as Fed rate cut optimism offset a build in US crude and fuel inventories.

• Beach Energy: +0.77% to $1.63
• Woodside: +0.72% to $27.34
• Santos: +0.60% to $7.54
• Viva Energy: +0.15% to $3.38

Mining sector

It has been a mixed day for the big miners as the market awaits further confirmation that iron ore prices are stabilising after falling over 6% this week.

• Fortescue: +0.46% to $24.22
• BHP: +0.21% to $43.99
• Rio Tinto: -0.67% to $124.77
• Mineral Resources: -1.60% to $68.44

ASX 200 technical analysis

This final month of FY 2024 is expected to see a period of sideways trading as the ASX 200 traces out a correction before a likely break higher in the new Financial Year towards 8000. Resistance from the top of the triangle on the chart below comes in around 7885.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 4 June 2024. 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.}