ASX200 Afternoon Report June 27th 2022

The ASX200 has kicked off the new week, adding a whopping 129 points to be trading at 6708 at 2.45 pm Sydney time.

Australia

The ASX200 has kicked off the new week, adding a whopping 129 points to be trading at 6708 at 2.45 pm Sydney time.

The rally follows a strong lead from U.S equity markets which rebounded 6.5% last week, supported by rebalancing flows for end of month and quarter. As well as a soft patch of economic data that has raised hopes the Fed may pivot earlier from its hawkish rate-hiking path and engineer an elusive “soft landing.”

Building on a 6% rally last week, the tech sector has added 2.8% today, enjoying the easing in interest rate hike expectations. Megaport (MP1) added 8% to $6.05, Afterpay owner Block (SQ2) added 5.6% to $104.00, Tyro Payments (TYR), added 5.5% to $0.86c, Seek (SEK) added 4.4% to $22.29 and EML Payments added 4.2% to $1.49.

After a 16% plunge during the first half of June, the Financial Sector has rebounded by 2.7% today. Commonwealth Bank (CBA) added 3.44% to $93.28, National Australia Bank (NAB) added 3.22% to $27.89 ANZ added 3.1% to $22.58, Westpac (WBC) added 2.36% to $19.94, and Macquarie (MQG) added 0.43% to $166.06.

The Energy sector has added 2.7% as crude oil stabilised near $107.50 per barrel ahead of this week’s OPEC+ meeting, expected to see a modest increase in production from the cartel. Beach Energy (BPT) added 4.26% to $1.65. Origin Energy (ORG) added 3.15% to $5.73. Woodside (WDS) lifted by 2.58% to $31.40, and Santos (STO) added 1.95%% to $7.36.

The Materials Sector has also recorded strong gains, supported by a 5% rally in iron ore and a 3% rally in coking coal futures in Asia. Fortescue Metals (FMG) added 3.8% to $17.94, BHP Group (BHP) added 3.57% to $41.45, Rio Tinto (RIO) added 2.61% to $104.05.

Elsewhere, Coal miners Whitehaven Coal (WHC) added 4.42% to $4.72, Coronado Coal (CRN) added 3.59% to $1.73, New Hope Coal added 2.78% to $3.33 and Yancoal (YAL) added 0.97% to $5.23. 

Taking the gloss off an otherwise outstanding day, a production downgrade by gold mining heavyweight Evolution Mining (EVN) has weighed as it fell 20% to $2.71. Northern Star Mining (NST) fell 11.76% to $7.05, Newcrest Mining (NCM) fell 5.95% to $21.67, and Silver Lake Resources (SLR) fell 3.27% to $1.33.

Technically, the ASX200 needs to extend today’s recovery above resistance at 6750/6850ish to negate the technical damage caused by the rout in June. A prospect that seems reasonable due to continued rebalancing flows this week and new money entering the market in early July.

ASX200 daily chart 27th of June

 

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Source Tradingview. The figures stated are as of June 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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