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ASX 200 afternoon report: 25 January 2024

Your ASX 200 afternoon report.

Source: Bloomberg

The ASX 200 trades 22 points (+0.32%) higher at 7543 at 1.50 pm AEDT.

The ASX 200 is set for a fifth consecutive session of gains, signing off in style ahead of the Australia day long weekend. The rally for the local bourse comes despite a muted response to Chinese authorities' latest attempt to revive the spluttering stock market.

Overnight, Chinese authorities announced they would cut the Reserve Requirement Ratio (RRR), which determines the amount of cash banks must keep in reserve by 50 basis points (bp) effective 5 February to provide 1 trillion yuan ($140 billion) in long-term liquidity to the market.

The Chinese stock market, the CSI 300, has fallen over 45% from its 2021 high, and if authorities were hoping that an RRR cut would lift the mood around the stock market and economy, they would have been disappointed with the CSI 300s muted 0.95% gain at lunchtime today.

Today's market movement

Mining sector

Nonetheless, the announcement did see the price of iron ore rally 2.4% overnight to $135.15 per tonne, which helped the big mining stocks extend their rebound.

  • Mineral Resources: +4.96% to $58.23
  • Rio Tinto: +1.74% to $131.95
  • Fortescue: +1.66% to $28.88
  • BHP: +1% to $47.33

Energy sector

The latest EIA data showed that crude oil inventories in the US plunged by 9.233 million barrels last week. The larger-than-expected draw saw the price of crude oil close above $75.00 per barrel for the first time in a month.

  • Beach Energy: +2.93% to $1.58
  • Viva Energy: +1.32% to $3.45
  • Woodside: +0.55% to $31.14

Financial sector

The ASX 200 financial sector is on track for a tenth week without loss.

  • Suncorp: +1.66% to $14.26
  • Westpac: + 0.25% to $23.62
  • ANZ: + 0.11% to $26.62
  • CBA was trading lower at $114.36 (-0.25%) after running into sellers operating ahead of $116.00 yesterday.

Tech sector

Earnings disappointment for Tesla this morning, which saw the EV maker's share price tumble 5.96% in after-hours trading, has weighed on the tech sector.

  • Block: -5.86% to $94.89
  • EML Payments: -3.83% to $0.88c
  • Appen: -3% to $0.33c
  • Megaport: -2.4% to $9.37

ASX 200 technical analysis

The ASX 200's 330-point (4%) pullback to last week's 7322 low likely completed the pullback we were looking for at the start of this year. This interpretation suggests a retest of the 7633 double top is likely in the coming sessions. Nonetheless, the ASX 200 has bigger battles to fight, and we remain neutral while the ASX 200 remains below range and year-to-date highs at 7633.

ASX 200 daily chart

Source: TradingView
  • Source: TradingView. The figures stated are as of 25 January 2024. 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.

The information 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 Bank S.A. 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 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. See full non-independent research disclaimer.

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