ASX 200 afternoon report: 16 November 2023

The ASX 200 trades 46 points (-0.65%) lower at 7060 at 2.45 pm AEDT.

After a dire three months, the first two weeks of November have been a breath of fresh air, as yesterday, the Australian share market traded to an eight-week high at 7125.6, 5.5% above its October 6751 low.

However, today, the ASX 200 has returned to a thud, courtesy of a very solid Australian jobs report, which brings the Reserve Bank of Australia (RBA) into play in 2024; and after the President Xi-Biden Summit ended with a sting in its tail.

The Australian labour force report showed the economy added 55k jobs in October vs. the 24k expected. The unemployment rate increased to 3.7% from 3.6%, as the participation rate rose to 67% from 66.8%. The latest job report highlights continued tightness in the labour market - and illustrates the RBA's dilemma as it looks to end its rate hike cycle in line with its global central bank peers.

While we don't think today's jobs report will cause the RBA to raise rates in December, the RBA will need to see labour market and inflation data ease in the coming months to avoid raising rates early in 2024. A prospect that unnerved the ASX 200.

Further ruffling the feathers of the local share market, US President Joe Biden cast a shadow at the end of his meeting with China's President Xi, saying he believed his Chinese counterpart was a dictator.

Today’s market movements

With the prospect of RBA rate rises back on the agenda, yesterday's sector winners were today's biggest losers.

Real estate sector

• Centuria Capital: -3.01% to $1.37
• Vicinity Canters: -2.13% to $1.84
• Scentre: -1.67% to $2.65
• Mirvac: - 1.21% to $2.04

IT sector

The interest rate-sensitive IT sector fell 1%

• Sezzle: -12.17% to $15.59
• Life360: -5.29% to $8.41
• EML Payments: - 2.64% to $1.10
• ZIP: -1.2% to $0.41c

Energy sector

The price of crude oil fell 2% overnight to $76.30 per barrel, following a larger-than-expected build in US inventories and, as the IEA said, the oil market isn't as tight as it thought.

• Beach Energy: -4.1% to $1.52
• Santos: -2% to $7.05
• Woodside: -0.86% to $32.10
• Viva Energy: - 0.66% to $3.03

Mining sector

The release of a supportive mix of China activity data yesterday and the price of iron ore trading at $130 per tonne has helped the big mining stocks hold their ground.

• Rio Tinto: + 0.06% to $125.68
• Mineral Resources: -0.06% to $62.76
• Fortescue: -0.32% to $25.10
• BHP: -0.38% to $46.67

Banking sector

The share price of AMP dived 14.53% as it said its NIM would fall to 1.25% for the 2023 financial year, down from 1.38% last year. Meanwhile, CBA was trading flat at $102.14.

• ANZ: -3.2% to $24.21
• NAB: -1.14% to $27.76
• Westpac: - 0.28% to $21.21

ASX 200 technical analysis

The rebound in the first week of November negated downside risks for the ASX 200. Providing it remains above the 30 October, 6751 low, the expectation is for the ASX 200 to test the 200-day moving average at 7200, with the scope to range highs at 7400 into year-end.

ASX 200 daily chart

• _{TradingView: the figures stated are as of 16 November 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.}