ASX200 Afternoon Report July 27th 2022

The ASX200 trades 17 points higher at 6825 - a six-week high at 3.20 pm Sydney time. 

The ASX200 has brushed off a weak overnight lead from Wall Street after better-than-expected earnings from U.S Mega tech companies Microsoft and Google dropped after the U.S market closed.

The ASX200 also found support from a rise in Australian headline inflation to 6.1% YoY, below consensus expectations for a 6.2% rise that has eased fears the RBA will deliver a supersized 75bp rate hike when it meets next week.

The focus of the global fight against inflation now turns squarely to the Federal Reserve, which is expected to deliver a second consecutive 75bp rate hike tomorrow morning Sydney time.

Health Care stocks have been the day's best performer, led by Bio-Tech giant CSL, which added 2% to $292.6. Resmed gained 1.5% to $24.43, Pro Medicus added 1.3% to $48.25, and Ansell added 1% to $25.91.

The Financial Sector has traded to a 7-week high, building on last week's stellar 4.39% gain. CBA added 1.85% to $98.51, NAB gained 1.1% to $30.06. Westpac added 1% to $21.35, ANZ added 0.1% to $22.77. Macquarie Bank bucked the trend falling 1.5% to $172.96

A stunning 40% post-lunch rally in Sezzle shares from $0.45c to a high of $0.79c before it entered a trading halt at $0.70c. ZIP added 23% to $1.27. EML Payments added 1.6% to $0.95c. Elsewhere, Novonix fell 3.25% to $2.40, and Appen fell 1.55% to $5.71.

A third successive monthly fall in U.S consumer confidence has cast its shadow over oil demand, and resulted in falls for the Energy Sector. Beach energy fell 1.9% to $1.77. Strike Energy fell 1.8% to $0.28c. Origin Energy fell 0.86% to $5.78, Woodside fell 0.3% to $31.50, and Santos fell 0.1% to $7.16.

Concerns around global steel demand and profit-taking ahead of Rio Tinto's half-year earnings report due out today a 4.15 pm Sydney time have flowed into the resource giants' share price. FMG fell 3.2% to $18.09, Rio Tinto fell 2.3% to $96.70 BHP fell 2.1% to $38.12.

The ASX200 continues to chip away at the band of resistance 6750/6950. To negate the technical damage caused by the breakdown in June, a sustained break above 6950 is required. Until this occurs, the rally from the 6407 low is viewed as a bear market countertrend rally.

Source Tradingview. The figures stated are as of July 27th, 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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