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ASX 200 afternoon report: August 3, 2023

Your ASX 200 afternoon report.

Source: Bloomberg

The ASX 200 trades 54 points (0.74%) lower at 7300 at 3.10 pm AEST.

Market turmoil extends from Asia to Europe and America

An ominous picture greeted traders this morning, with equity and other risk assets doused in a sea of red ink as yesterday's free fall during the Asian time zone extended into the European and American sessions.

However, worst fears have been averted for now, with the ASX 200 bravely holding near 7300 on a lack of follow-through selling as US yields and equity futures stabilised during the day.

Investors eye China's inflation data

Next week, investors will closely monitor the release of inflation data in China. Market expectations suggest a decline of -0.5% MoM in July, signaling the challenges of a stalled reopening, cautious consumer behavior, and an economy moving towards deflation for the first time since February 2021.

Mining sector

  • Rio Tinto fell 1.86% to $113.76
  • Fortescue fell 1.53% to $21.22
  • BHP group fell 1.42% to $45.20
  • Mineral Resources fell 1.33% to $69.22

IT sector

  • Link Administration fell 3.34% to $1.45
  • Block (owner of Afterpay) fell 2.56% to $115.47
  • Xero fell 2.43%
  • Zip fell 2.17% to $0.45c

Energy sector

After its 16% rally in July, crude oil's price fell below $80 overnight on a bout of profit-taking.

  • Crude oil's price fell below $80 overnight on a bout of profit-taking.
  • Santos fell 0.95% to $7.81
  • Beach Energy fell 0.92% to $1.61
  • Woodside Energy fell 0.66% to $37.62

Financial sector

  • CBA fell 1.12% to $102.30 ahead of its Full Year earnings report next Wednesday.
  • NAB fell 1.07% to $27.81
  • Westpac fell 0.75% to $21.82
  • ANZ fell 0.87% to $15.13

Consumer-facing stocks

On a day of few highlights, expectations that the RBA is at or close to its peak terminal rate have supported consumer-facing stocks.

  • Aristocrat Leisure gained 1.23% to $40.20
  • Metcash gained 1.53% to $3.65
  • Treasure Wine Estates gained 0.5% to $11.43
  • Coles Group added 0.44% to $18.23

ASX 200 technical analysis

Last week the ASX 200 broke through the top of a three-month range to its highest level in five months - a move exposed as a false break higher. The last false break in the ASX 200 occurred just under a month ago when it appeared to have broken to the downside, only for a robust rally to follow.

While we aren't convinced the opposite will occur this time, recent price action confirms the ASX 200 is very comfortable ping-ponging either side of 7200.

ASX 200 daily chart

Source: TradingView

  • TradingView: the figures stated are as of August 3, 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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