ASX200 Afternoon Report June 2nd 2022

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Tony Sycmore
By : ,  Market Analyst

The ASX200 is trading 73 points lower at 7146 at 3.00 pm Sydney time as the volatility episode of 2022 extends into a six month.

Today's fall came after another round of hawkish Fed speak overnight and the Bank of Canada overnight lifted rates by 50bp, an amount becoming the "new normal" as central banks double down on their war against inflation.

Also rattling jittery markets, a warning from JP Morgan's CEO to prepare for an economic "hurricane" caused by aggressive central bank tightening and the war in Ukraine.

As well as hyper volatility in the oil market as the price of crude oil, which traded near $120p/b this week, plummeted below $112 p/b today on reports Saudi Arabia may raise production to compensate for the loss of Russian oil.

Weighing on the local market, Healthcare stocks as Sonic Healthcare (SHL) fell 2.72% to $35.62, Biotech giant CSL fell 2.25% to $267.35, Cochlear (COH) fell 1.9% to $217.69, and Resmed (RMD) fell 1.60% to $28.24.

Monday's rebound is now just a distant memory for the IT sector falling for the third day. Life 360 (360) fell 5.85% to $3.22, Sezzle (SZL) fell 8.1% to $0.51c, Zip (ZIP) fell 8.2% to $0.84c, kids smart watch maker Space Talk (SPA) fell 4.69% to $0.061c, Afterpay owner Block (SQ2) fell $115.18 and cloud computing firm Megaport (MP1) fell 4% to $6.67.

Falls also for the Industrial sector led by plumbing company Reece (REH) down 5.2% to $15.31, Downer Edi (DOW) fell 2.5% to $5.61, CSR fell 2.2% to $4.48, Qantas (QAN) fell 2% to $5.42, and Brambles (BXB) fell 2% to $10.76.

The big banks have fallen in line with a strong seasonal tendency to underperform until July. Macquarie (MQG) fell 2.45% to $183.77, Commonwealth Bank (CBA) fell 1.4% to $105.23. ANZ fell 1.15% to $25.02, National Australia Bank (NAB) fell 0.67% to $31.43, Westpac (WBC) fell 0.33% to $24.02.

Falls as well for the big miners. Mineral Resources (MIN) dropped 1.96% to $57.55; Rio Tinto (Rio) fell 1.94% to $112.68. Fortescue Metals (FMG) fell 1.45% to $20.46, BHP Group (BHP) fell 1% to $45.18.

Gains for the coal miners as rival energy source natural gas soared 6.57% in overnight trading and as China's reopening continued. New Hope Corporation (NHC) added 2.4% to $3.84, Whitehaven Coal (WHC) added 2.33% to $5.28, and Coronado Global (CRN) lifted by 0.24% to $2.11.

Woodside (WDS) has added 5% to $31.70 after a large block trade went through the market that likely cleared legacy selling of unwanted Woodside stock from the petroleum demerger. Gains also for Beach Energy (+2.3%) to $1.79 and Santos (+1%) to $8.28 despite today's fall in the price of crude oil.

A mixed day for Lithium miners. Pilbara Minerals (PLS) fell 20% to $2.36, Liontown Resources (LTR) added 3.9% to $1.19 after Core Lithium (CX0) added 3.83% $1.15 after both were savaged yesterday ~20%. Galan Lithium (GLN) continued its decline falling 1.12% to $1.32, as did Allkem (AKE), which fell 0.34% to $11.56

Over the past nine months, the ASX200 has traded between a broad 6750/6730 type range. The middle of the range is 7200ish, and 100 points on either side is “no man's” land.

A break above the 200-day moving average at 7320/30 would indicate that a move towards the top of the range is underway. While a move below 7100ish would suggest, a test of range lows is underway.

ASX200 Daily Chart june 2nd

Source Tradingview. The figures stated are as of June 2nd, 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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