ASX200 Afternoon Report May 19th 2022

The ASX200 has plunged, to be trading 108 points lower at 7075 at 3.15 pm Sydney time.

Australia

This content will only appear on City Index websites!

The ASX200 has plunged, to be trading 108 points lower at 7075 at 3.15 pm Sydney time.

After a promising start to the week, the ASX200 collapsed after a morale-sapping session on Wall Street as the benchmark index, the S&P500 dived 4% on Wednesday, its biggest one-day fall since June 2020.

The cause of the overnight weakness on Wall Street was a sting in the tail of the Q1 2022 earnings season. The shares of U.S. retail giant Target plunged 25 per cent, its largest drop since the 1987 market crash, after missing on earnings and echoing a similar warning from Walmart that rising cost pressures are eroding profit margins.

Retail and consumer stocks on the ASX200 have faced the music, with many household names being run over in an investor stampede to avoid a similar fate as Target.

Woolworths (WOW) lost 6.92% to $34.70, Wesfarmers (WES) lost 6.85% to $46.38, JB Hi-Fi (JBH) fell 6.2% to $45.10, Metcash (MTS) fell 5.77% to $4.33, Coles (COL) slumped by 4.50% to $17.62. Aristocrat bucked the trend to be trading 6.3% higher at $33.61 after announcing a $500m share buyback.

Travel stocks were also caught in the merciless crossfire. Flight Centre (FLT) fell 5.5% to $20.04, Corporate Travel (CTD) fell 3.3% to $21.65, Webjet (WEB) fell 1.9% to $5.68, despite reporting April to be its most profitable month since covid-19. Qantas (QAN) fell 1.8% to $5.42.

Being thrown once again onto the trash pile IT sectors felt the wrath of investors. Novonix (NVX) fell 6.1% to $3.69, Life 360 (360) fell 6% to $3.42, Altium (ALU) fell 4.1% to $27.23, Megaport (MP1) fell 3.69% to $7.05, Xero (XRO) fell 3.5% to $85.35, EML Payments (EML) fell 2.9% to $1.42. New 52-week lows for Zip (ZIP) which fell 3.6% to $0.87c and Sezzle (SZL) which fell 2.5% to $0.59c.

Often an anchor in uncertain times, there was no escape for the big banks, despite labour force data for April confirming that the jobless rate fell to its lowest level since the 70’s. Westpac (WBC) fell 4.17% to $23.42. ANZ fell 1.97% to $25.33, and National Australia Bank (NAB) fell 1.44% to $310.84. Commonwealth Bank (CBA) fell 1.1% to $103.62, and Macquarie (MQG) fell 1.96% to $177.94.

The Materials sector also gave back a good chunk of this week's gains as investors sought safety in cash. Lynas Rare Earths (LYC) fell 3.7% to $9.45, Mineral Resources (MIN) fell 2.5% to $59.24, Rio Tinto (Rio) fell 2% to $106.72. Fortescue Metals (FMG) fell 1.75% to $19.43. BHP Group (BHP) fell 1.7% to $46.24, and Oz Minerals (OZL) fell 1.35% to $22.58.

Rounding out a miserable day for the dirt diggers, Lithium names have fallen again today. Lake Resources (LKE) fell 4.67% to $1.42. Liontown Resources (LTR) fell 4.6% to $1.25, Galan Lithium (GLN) fell 4.4% to $1.41. Vulcan Energy (VUL) fell 2.7% to $7.27, and Core Lithium (CX0) fell 2.3% to $1.28.

Turning to the charts. Over the past fortnight, the ASX200 has followed the road map almost to the T. After hitting our 7000/6950ish downside target last week, we called for a recovery towards 7200, a level it tagged yesterday.

Technically, a final leg lower towards range lows 6950/6750 is needed. However, whether that plays out will depend on this weekend's Federal Election outcome.

ASX200 Daily Chart 19th 2

Source Tradingview. The figures stated are as of May 19th, 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

This content will only appear on Forex websites!

How to trade with City Index

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

  1. 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

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

The ASX200 has plunged, to be trading 108 points lower at 7075 at 3.15 pm Sydney time.

After a promising start to the week, the ASX200 collapsed after a morale-sapping session on Wall Street as the benchmark index, the S&P500 dived 4% on Wednesday, its biggest one-day fall since June 2020.

The cause of the overnight weakness on Wall Street was a sting in the tail of the Q1 2022 earnings season. The shares of U.S. retail giant Target plunged 25 per cent, its largest drop since the 1987 market crash, after missing on earnings and echoing a similar warning from Walmart that rising cost pressures are eroding profit margins.

Retail and consumer stocks on the ASX200 have faced the music, with many household names being run over in an investor stampede to avoid a similar fate as Target.

Woolworths (WOW) lost 6.92% to $34.70, Wesfarmers (WES) lost 6.85% to $46.38, JB Hi-Fi (JBH) fell 6.2% to $45.10, Metcash (MTS) fell 5.77% to $4.33, Coles (COL) slumped by 4.50% to $17.62. Aristocrat bucked the trend to be trading 6.3% higher at $33.61 after announcing a $500m share buyback.

Travel stocks were also caught in the merciless crossfire. Flight Centre (FLT) fell 5.5% to $20.04, Corporate Travel (CTD) fell 3.3% to $21.65, Webjet (WEB) fell 1.9% to $5.68, despite reporting April to be its most profitable month since covid-19. Qantas (QAN) fell 1.8% to $5.42.

Being thrown once again onto the trash pile IT sectors felt the wrath of investors. Novonix (NVX) fell 6.1% to $3.69, Life 360 (360) fell 6% to $3.42, Altium (ALU) fell 4.1% to $27.23, Megaport (MP1) fell 3.69% to $7.05, Xero (XRO) fell 3.5% to $85.35, EML Payments (EML) fell 2.9% to $1.42. New 52-week lows for Zip (ZIP) which fell 3.6% to $0.87c and Sezzle (SZL) which fell 2.5% to $0.59c.

Often an anchor in uncertain times, there was no escape for the big banks, despite labour force data for April confirming that the jobless rate fell to its lowest level since the 70’s. Westpac (WBC) fell 4.17% to $23.42. ANZ fell 1.97% to $25.33, and National Australia Bank (NAB) fell 1.44% to $310.84. Commonwealth Bank (CBA) fell 1.1% to $103.62, and Macquarie (MQG) fell 1.96% to $177.94.

The Materials sector also gave back a good chunk of this week's gains as investors sought safety in cash. Lynas Rare Earths (LYC) fell 3.7% to $9.45, Mineral Resources (MIN) fell 2.5% to $59.24, Rio Tinto (Rio) fell 2% to $106.72. Fortescue Metals (FMG) fell 1.75% to $19.43. BHP Group (BHP) fell 1.7% to $46.24, and Oz Minerals (OZL) fell 1.35% to $22.58.

Rounding out a miserable day for the dirt diggers, Lithium names have fallen again today. Lake Resources (LKE) fell 4.67% to $1.42. Liontown Resources (LTR) fell 4.6% to $1.25, Galan Lithium (GLN) fell 4.4% to $1.41. Vulcan Energy (VUL) fell 2.7% to $7.27, and Core Lithium (CX0) fell 2.3% to $1.28.

Turning to the charts. Over the past fortnight, the ASX200 has followed the road map almost to the T. After hitting our 7000/6950ish downside target last week, we called for a recovery towards 7200, a level it tagged yesterday.

Technically, a final leg lower towards range lows 6950/6750 is needed. However, whether that plays out will depend on this weekend's Federal Election outcome.

 

ASX200 Daily Chart 19th 2

 Source Tradingview. The figures stated are as of May 19th, 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

 

  1. Open a Forex.com account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account