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ASX 200 afternoon report: 27 February 2024

Your ASX 200 afternoon report.

Source: Bloomberg

The ASX 200 trades five points (0.06%) higher at 7657 at 3.15pm AEDT.

Navigating market sentiment amidst earnings reports and inflation anticipation

The optimism that propelled the ASX 200 to within 20 points of its all-time high of 7703.6 yesterday has further subsided today as traders grapple with assimilating the latest slew of earnings reports in anticipation of a crucial inflation update tomorrow. Inflation data released towards the end of January indicated a moderation in inflation across key quarterly and monthly metrics, notably the monthly Consumer Price Index (CPI) indicator for December, which saw a year-on-year increase of 3.4%, falling short of the anticipated 3.7%.

For January, it is anticipated that the monthly CPI indicator will climb to 3.5% year-on-year, largely attributed to base effects.

Nevertheless, the prevailing trend of subdued inflation alongside a cooling labour market is expected to prompt the Reserve Bank of Australia (RBA) to shed its tightening stance in the coming months, paving the way for a 25 basis point (bp) rate reduction in August, followed by a subsequent 25 bp cut in November.

Today’s market movement

Turning to the notable moves that followed today's earnings reports. Coles' share price surged 5.64% to AUD 16.77 after reporting its underlying Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) increased 4.1% to AUD 1,900 million, and a fully franked interim dividend of 36 cents per share. The market's reaction to Coles' earnings report in stark contrast to that of rival Woolworths, whose share price fell 8.89% last week after its earnings report missed expectations and CEO Brad Banducci announced his shock retirement.

A tough day for property service group Johns Lyng, whose share price fell 15.14% to AUD 6.11 after reporting its profit after tax was down 7.3% to AUD 23.4 million. City Chic Collective was another to feel the heat after its earnings report disappointed investors. Its share price was trading 12.50% lower at AUD 0.49 at the time of writing.

ASX 200 stocks

Mining stock

A 4% fall in the price of iron ore overnight to $115.20 has weighed on the big miner stocks.

  • Fortescue: -0.88% to $27.60
  • Rio Tinto: -0.62% to $121.80
  • BHP: - 0.08% to $43.93 after trading to a four-month low at $43.40 earlier in the session

Banking sector

In contrast, it is a better day for the big banks.

  • NAB: +0.58% to $34.09
  • Westpac: +0.46% to $26.15
  • ANZ: + 0.28% to $28.45
  • CBA: +0.86% to $116.92, within touching distance of its all-time high of $118.24

Energy sector

Concerns around shipping disruptions in the Red Sea have supported a rebound higher in the price of crude oil to $77.58 - offsetting a more hawkish Fed currently weighing on the demand side of the crude oil equation.

  • Woodside: + 1.08% to $30.32
  • Viva Energy: + 1.17% to $3.47

ASX 200 technical analysis

The decline from the Early February 7703 high to the mid-February 7489 low unfolded in three waves, usually indicative of a corrective or countertrend move. As such, providing the ASX 200 remains above the recent 7489 low, expect a retest and break of the 7703 high with scope to 7900.

ASX 200 daily chart

Source: TradingView
  • Source: TradingView. The figures stated are as of 27 February 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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