ASX200 Afternoon Report May 10th 2022

The ASX200 is trading 1.16% lower at 7038 at 3.15pm, paring losses after falling as much as 2.5% shortly after the open.

The volatile performance came after Wall Street hit another sizeable air pocket of turbulence overnight and after a large sell order hit the ASX200 futures market soon after the open.

The sell order appears to have been 10,000 futures contracts or the equivalent to $1.75billion of ASX200 exposure and likely to have been a leveraged offshore fund closing out a bullish bet on the ASX200 market due to the shadow that Chinas Covid lockdowns have cast over commodity and energy prices.

Rio Tinto (Rio) fell 4% to $102.56. Fortescue Metals (FMG) fell 3.1% to $19.01, Mineral Resources (MIN) fell 2.8% to $52.22, and BHP Group (BHP) fell 2.9% to $44.87.

Crude oil prices are trading below $102 p/b on concerns over softening demand from China's lockdowns, higher interest rates and SPR releases. Also weighing on the crude price news, Saudi Arabia, the world's largest exporter, lowered crude oil prices for Asia and Europe.

Beach Energy (BPT) fell 5.07% to $1.59, Woodside Energy (WPL) fell 3.2% to $30.56.Santos (STO) fell 2.66% to $7.87; Origin Energy fell 1.87% lower to $6.81.

A mixed session for the ASX200 IT sector, as Afterpay owner Block (SQ2) fell 9.36% to $121.60 and Sezzle (SZL) fell 1.24% to $0.80c. A better day for Life 360 (360) as it added 4.52% to $3.24, Wisetech Payments (WTC) added 3.5% to $40.90, Tyro Payments (TYR) added 3.33% to $1.08.

The Financial Sector has not been immune from today's carnage. Macquarie (MQG) fell 1.42% to $179.46. Commonwealth Bank (CBA) fell 1.46% to $101.24, ANZ fell 1.38% to $25.67, Westpac (WBC) fell 0.24% to $24.56. National Australia Bank (NAB) was trading flat at $31.66.

Stocks in the Lithium space have tumbled again, led by Galan Lithium (GLN) which fell 5.16% to $1.47, Allkem (AKE) fell 4.15% to $10.85, Iluka Resources (ILU) fell 3.66% to $10.13, Lake Resources (LKE) fell 3.08%% to $1.42.

Pendal (PDL) is trading 6.90% higher at $5.27 after reporting higher revenues, and News Corp (NWS) had added 4.5% to $25.34 after a torrid day yesterday.

Last week's break of uptrend support and recent lows at 7230 resulted in a short-term bearish stance on the ASX200, targeting a test of support at 7000/6950, which was achieved shortly after the open this morning. We look to resell bounce towards 7150.

Source Tradingview. The figures stated are as of May 10th, 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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