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ASX 200 afternoon report: August 15, 2023

Your ASX 200 afternoon report.

Source: Bloomberg

The ASX200 trades 26 points (0.35%) higher at 7302 at 3.55 pm AEST.

ASX 200: Recent developments

Today, the ASX 200 managed to recover a portion of the significant loss it experienced yesterday, driven by optimistic cues from Wall Street and a series of unrelated favorable events unfolding across Asia. These factors have collectively contributed to stabilizing the delicate market sentiment.

Asian markets on the move

Just moments before the ASX 200 commenced its trading day, Japan delivered a much-needed boost as Q2 GDP figures revealed a robust growth of 1.5% QoQ, equating to an impressive annualized rate of 6% QoQ. This performance notably surpassed market predictions of 0.8% QoQ and 2.9% QoQ annualized growth.

Further bolstering the positive momentum, the People's Bank of China (PBoC) took market participants by surprise with a substantial 15 basis-point reduction in the benchmark 1-year lending rate, effectively bringing it down from 2.65% to 2.50%. This marked the most significant rate cut observed since 2020, effectively assuaging concerns related to China's property sector and sluggish economic indicators.

RBA's cautious tone and macro development

Simultaneously, the release of the Reserve Bank of Australia (RBA) minutes from the August meeting introduced a more tempered tone to the RBA's already circumspect approach toward tightening monetary policy. The minutes acknowledged the potential necessity for "some further tightening of monetary policy might be required to ensure that inflation returns to target in a reasonable timeframe."

To cap off today's series of encouraging macroeconomic developments, Australia's June quarter wages data depicted a 0.8% increase or 3.6% YoY. Although slightly falling short of market predictions for a 0.9% rise and 3.7% YoY growth, it's important to note that the full impact of recent adjustments to minimum and award wages is expected to materialize upon the release of September quarter data.

AU earnings season highlights

In the ongoing earnings season, companies across diverse sectors have been unveiling their financial performance, leading to notable shifts in the market. Below is a glimpse of some prominent players and their performance:

  • Bio-tech giant CSL: Amid the earnings buzz, CSL exhibited remarkable strength by recording a robust surge of 5.45% in its share price, reaching $274.64. The company's earnings report unveiled a significant 10% increase in underlying profits, marking a substantial achievement at $US2.61 billion
  • Cochlear - advancements in health innovation: The Bionic ear company Cochlear also garnered attention as its share price witnessed a remarkable upswing of over 8%. This surge followed the release of Cochlear's earnings report, which highlighted a commendable 4% rise in its annual profit, amounting to $300.5 million
  • Seek - navigating challenges: On a different note, job-finding company Seek experienced a challenging trajectory, resulting in a notable 5.34% decrease in its share price, settling at $24.39. This downturn was influenced by factors such as the anticipation of elevated unemployment and a significant 16% drop in profits, reaching $203 million
  • Life 360 - impressive growth: Contrasting the challenges, Life 360 emerged as a standout performer with an impressive share price surge of 12.2%, reaching $9.00. The company's earnings report underscored remarkable achievements, including a robust EBITA of $US5.7 million and an impressive 45% increase in revenue, amounting to US$70.8 million.

The ASX 200 market movements today

Financial and mining sectors

Away from reporting season, the share of the big miners as well as the banking sector were mixed.

  • Fortescue added 1.21% at $20.88
  • BHP trades lower at $44.67
  • Rio Tinto trades 0.35% lower at $106.14
  • NAB added 1.27% to $28.69
  • Westpac added 0.37% to $21.98
  • ANZ and CBA each trade lower by 0.25%.

ASX 200 technical analysis

After being rejected from the late July/early August 7472 double top, the ASX 200 initiated its next downward move yesterday. According to wave equality projections, this move is expected to target around 7174. To instill a more positive outlook, the ASX 200 must achieve a sustained closure above the range of 7360/90.

ASX 200 daily chart

Source: TradingView

  • TradingView: the figures stated are as of August 15, 2023. 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 information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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