ASX200 Afternoon Report April 12th 2022

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The soft start to the new trading week has continued today as the ASX200 closed 31pts lower at 7454, with all 11 sectors closing lower on the day. (Levels below are as of 3pm Sydney time)

The ASX200 losing ground after the rout in the tech-heavy Nasdaq deepened overnight raising concerns that the start of Q2 2022 is following the template laid down earlier this year when the Nasdaq plunged over 15% in January on surging bond yields.

You can read our note published last night - What next for the bond beaten Nasdaq? here

ZIP Co (Z1P) fell 5% to $1.33, its lowest level since March 2020. Cloud computing company Megaport (MP1) fell 4.32% to $11.97, Sezzle (SZL) fell 4% to $1.19, while Wisetech (WTC) lost 2.6% to $47.15. Afterpay owner Block (SQ2) bucked the trend to lift 0.15% to $164.72.

Energy and Materials stocks fell on concerns that demand will fall as China looks to implement wider and extended lockdowns to stifle the latest virus outbreak.

Origin Energy (ORG) dropped by 1.23% to $6.43. Santos (STO) fell by 1.3% to $7.97. Woodside Petroleum (WPL) fell 0.7% to $31.85. Beach Energy (BPT) and AGL Energy (AGL) are both up slightly on the day.

Elsewhere, New Hope Corporation (NHC) fell 2.35% to $3.74, Whitehaven Coal fell 1.7% to $4.41 on profit-taking after an extraordinary run higher. Despite reporting record quarterly sales, Lynas Rare Earths (LYC) fell 3.26% to $9.51. BHP Group (BHP) fell 0.42% to $51.47. Fortescue Metals (FMG) dropped 0.2% to $21.15. Rio Tinto (Rio) bucked the trend to add 0.1% to $117.59.

Despite NAB business confidence data increasing to a five-month high of 16, concerns remain that cost-of-living pressures and the uncertainty of the Federal Election will weigh on households and consumer-facing stocks.

Domino’s Pizza (DMP) slid 1.3% to $78.95. Wesfarmers (WES) dropped 1% to $47.97. JB Hi-Fi (JBH) fell 0.8% to $51.40 while Webjet (WEB) dropped by 0.4% to $5.28.

The Big Banks have come under pressure following a downgrade to ANZ by U.S investment bank Morgan Stanley citing revenue pressures, costs uncertainties, and concerns over challenges facing the Australian retail banking sector.

ANZ fell 1.1% to $27.39, Westpac (WBC) fell 0.6% to $24.09. Commonwealth Bank (CBA) fell 0.4% to $106.42, while National Australia Bank (NAB) fell 0.2% to $32.90.

The Lithium space remains lively at the risk of sounding like a broken record.

After surging 7% yesterday, Lake Resources (LKE) fell 8% today to $1.83, despite a broker upgrade. Pilbara Minerals (PLS) fell 5.6% as results for the March quarter showed it met its quarterly production targets. Elsewhere, Liontown Resources fell 5.34% to $1.60, and Galan Lithium fell 4.46% to $1.93.

The AUDUSD is trading at .7427 after holding support at .7400c on the better NAB Business Confidence data from earlier this morning and some squaring up ahead of US inflation data due out this evening.

ASX200 Daily Chart 12th of April

Source Tradingview. The figures stated are as of April 12th, 2022. 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

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