ASX200 Afternoon Report June 21st 2022

The ASX200 is trading 94 points higher at 6527 at 3pm Sydney time and is set to snap a seven-session losing streak that has wiped over $200 billion off the local index.

The rally on the ASX200 follows a long weekend in the U.S, which has acted as a circuit breaker of sorts, allowing investors to regroup and take stock after U.S equity markets plunged 10% over the past two weeks.

Also supporting, a speech today by RBA Governor Phillip Lowe, who pushed back on the interest rate markets aggressive pricing of RBA rate hikes and noted it would be unlikely that the cash rate gets anywhere near the 4% the market is currently pricing.

Finally, after a horrific run, the market will start to look at potential rebalancing flows for end of month, end of the quarter and end of financial year, which I would expect to be supportive of stock markets at the expense of fixed income.

Reversing a run of heavy falls, the Energy and the Materials Sectors have been the best on the ground today, supported by a rally in iron ore, coal and crude oil futures prices during the Asian time zone.

Beach Energy (BPT) added 3.87% to $1.61. Woodside (WDS) lifted by 3.97% to $31.57, Origin Energy (ORG) added 2.6% to $5.59, and Santos (STO) added 2.53% to $7.51.

Coal miner, Yancoal (YAL) added 6.36% to $5.35, Whitehaven Coal (WHC) added 4.19% to $4.73, New Hope Coal added 3.75% to $3.33 while Coronado Coal (CRN) added 0.91% to $1.66

Iron Ore heavy weight Fortescue Metals (FMG) added 2.53%% to $17.44, Rio Tinto (RIO) added 2.52% to $104.17, BHP Group (BHP) added 2.55% to $41.72. Elsewhere South32 (S32) added 2.46% to $4.16 while Lynas (LYC) added 4.17% to $8.74.

A rebound also for the financial stock’s supported by lower yields as the Aussie front end cratered following the more dovish tones from the RBA Governor this morning.

National Australia Bank (NAB) added 3.18% to $26.88. ANZ added 2.52% to $21.93, Westpac (WBC) added 2.34% to $19.64, Commonwealth Bank (CBA) added 1.84% to $89.16, and Macquarie (MQG) added 1.7% to $164.33.

A mixed session for the IT sector. Novonix (NVX) added 6.6% to $2.50, Life 360 (360) added 5.8% to $2.75, Afterpay owner Block (SQ2) added 2% to $86.01. Elsewhere, Megaport (MP1) fell 4% to $5.08, more pain for BNPL stock ZIP (ZIP) as it fell 0.94% to $0.53 and Wisetech Global (WTC) fell 0.9% to $35.77.

The roller-coaster ride in the Lithium space continues. Lake Resources (LKE) plunged 21% to $1.07; Core Lithium (CXO) fell 5.6% to $1.02. Elsewhere, Pilbara Minerals (PLS) added 3.43% to $2.11, Allkem (AKE) added 3% to $10.09, and Iluka Resources (ILU) added 2.75% to $8.97.

Until last week, the ASX200 appeared to be tracing out an orderly correction - trading just 10% below its all-time highs and within a well-defined nine-month range between 7630 and 6750ish. However, the decisive break from the bottom of the range 6850/6750 early last week created significant technical damage to the index.

The ASX200 must rebound above 6750/6850ish to restore some much-needed confidence in the market. Otherwise, the risks are for the ASX200 to continue lower towards 6000 with scope to 5750 once the expected end of month rally is complete.

Source Tradingview. The figures stated are as of June 21st, 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

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the company you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.