ASX200 Afternoon Report July 19th 2022

The ASX200 is trading 41 points lower at 6646 at 3.15 pm Sydney time.

The souring in risk sentiment today comes after an overnight sell-off on Wall Street wrong-footed the local market following reports that Apple intends to slow hiring to prepare for a possible recession

The release of RBA Meeting Minutes added a hawkish element, noting that "the current level of the cash rate is well below" the estimated neutral rate and reiterated that "The size and timing of future interest rate increases will continue to be guided by the incoming data and the Board's assessment of the outlook for inflation and the labour market."

Last week's thumping labour market report and elevated Q2 inflation data to be released next week will be fresh in the Boards mind when it meets in August.

Tech stocks have eased following the deterioration in risk sentiment. Xero fell 6.66% to $82.17, Megaport fell 6.07% to $6.35, Wisetech Global fell 5.4% to $44.72, EML Payments lost 4.6% to $1.04, and Tyro Payments lost by 3.57% to $0.68c.

Health care stocks have also fallen. Resmed lost 4.3% to $31.74, Sonic Healthcare lost 4% to $32.84, Cochlear fell 3.35% to $204.68 and CSL fell 2.3% to $289.87.

A mixed session for banking stocks as analysts continue to assess the implications of ANZ's proposed takeover of Suncorp. Suncorp gave back most yesterday's gains, falling 4.3% to $11.27. Macquarie fell 3.32% to $167.58. Westpac added 0.25% to $20.20, CBA added 0.25% to $94.47. ANZ shares remain in a trading halt as it looks to raise $3.5 billion to help fund the purchase of Suncorp.

The boom run for Coal stocks continues, supported by a rally in commodity futures in China. Whitehaven Coals shares added 5.93% to $6.25, New Hope Coal added 4.65% to $4.51. Yancoal added 2.05% to $5.97, and Coronado Coal added 0.30% to $1.68.

Energy stocks have recorded gains as crude oil rebounded above $100 as the hysteria over a 100bp rate hike at next week's FOMC meeting continues to ease. Strike Energy added 5.66% to $0.28c, Woodside added 3.5% to $32.40, Beach Energy climbed by 2.9% to $1.77 and Santos added 1.96% to $7.30.

BHP has fallen by 0.73% to $36.70 after flagging softer-than-expected production volumes from their Australian iron ore and coking coal divisions, citing pandemic and weather-related disruptions. Elsewhere FMG added 0.62% to $16.99, Rio Tinto added 0.13% to $95.39 and Mineral Resources added 0.3% to $45.25

In the Lithium space, Lake Resources surged by 12.8% to $0.71. Vulcan Energy has added 5.25% to $6.22, Iluka Resources added 0.7% to $8.65, and Liontown Resources added 0.75% to $1.04.

Turning to the charts, the ASX200's rapid retreat below 6650/60 negates the positive signs that emerged yesterday, leaving the ASX200 back within a well-worn 6660/6540 type range.

Source Tradingview. The figures stated are as of July 19th, 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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