ASX200 Afternoon Report June 6th 2022

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After notching up three straight weeks of gains, the ASX200 is trading 23 points lower at 7216 at 2.55 pm Sydney time.

Today's stumble comes after a tentative rally on Wall Street hit the skids last week as resilient U.S economic data heightens expectations for a 50bp hike at the September FOMC meeting.

Also undermining confidence, continued turmoil in energy markets as crude oil pushed above $120 p/b on expectations of increased demand from the re-opening in China and the start of the driving season in the U.S.

Higher energy prices feed into inflationary expectations and higher interest rates, a sure recipe for another wave of selling in the beaten-up IT Sector.

Tyro Payments (TYR) fell 5.4% to $0.96c after being removed from the ASX200. Afterpay owner Block (SQ2) fell 3.8% to $115.21, and Appen (APX) fell 3.75% to $6.16 as it joined Tyro exiting the ASX200. Novonix fell 3.56% to $3.52, and cloud computing firm Megaport (MP1) fell 3.37% to $6.31.

Falls also for the Industrial Sector led by Qantas (QAN), falling by 2.37% to $5.36, plumbing company Reece (REH) dropped 1.96% to $15.00. Boral (BLD) fell 1.7% to $2.88, and Seven Group Holdings (SVW) fell 1.5% to $18.98.

A hit also for the Materials sector despite the price of iron ore and other commodities extending gains following the China re-opening. OZ Minerals (OZL) fell 1.74% $24.29, BHP Group (BHP) fell 0.73% to $46.44. Fortescue Metals (FMG) fell 0.33% to $22.40, South 32 (S32) fell 0.2% to $5.07.

Enjoying the tailwinds of higher energy prices, the coal miners have made gains led by New Hope Coal (NHC), an inclusion in the ASX200, which added 1.54% to $3.96. Whitehaven Coal (WHC) added 1.39% to $5.49, and Coronado Coal (CRN) added 0.45% to $2.15.

Woodside (WDS) has extended its gains lifting by 2.4% to $32.57 following a bullish note by a U.S investment bank. Beach Energy (BPT) lifted by 1.65% to $1.85, Santos (STO) added 1.43% to $8.52.

The big banks have fallen in line with a strong seasonal tendency to underperform until July. National Australia Bank (NAB) fell 0.86% to $31.01, ANZ fell 0.52% to $24.89, Commonwealth Bank (CBA) fell 0.36% to $104.82, Macquarie (MQG) fell 0.15% to $183.77, and Westpac (WBC) fell 0.17% to $23.96.

The roller coast ride in the Lithium space continues. Vulcan Energy (VUL) fell 3.1% to $7.45, Galan Lithium (GLN) fell 2.9% to $1.33, Iluka Resources (ILU) fell 2.46% to $10.72, and Liontown Resources (LTR) fell 2.76% to $1.23. New ASX200 inclusions, Core Lithium (CXO) and Lake Resources (LKE) fell 0.4% and 1%, respectively.

Over the past nine months, the ASX200 has traded within a broad 6750/7630 type range. The middle of the range is 7200ish, and 100 points on either side of here is "no man's" land. A break above the 200-day moving average at 7320/30 would indicate that a rally towards the top of the range is underway. While a move below 7100ish would indicate a test of range lows is underway.


 ASX200 6th of June

Source Tradingview. The figures stated are as of June 6th, 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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