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ASX 200 afternoon report: August 8, 2023

Your ASX 200 afternoon report.

Source: Bloomberg

The ASX 200 trades 13 points (0.17%) higher at 7321 at 3.30 pm AEST.

ASX 200: Recent developments

A session of disappointment unfolded for the ASX 200, relinquishing a significant portion of its early gains due to a combination of bleak economic data and subdued earnings reports.

Impact of RBA decision and inflation trends

The Reserve Bank of Australia's decision to maintain rates at the previous level last week, coupled with a softer inflation reading from the previous month, had raised expectations for an upward surge in today's consumer confidence release.

Nevertheless, the outcome proved surprising as the consumer confidence figure dropped to 81 (down from the earlier 81.3), persistently residing in deeply pessimistic terrain due to households grappling with the strains of living costs.

Business confidence and wage insights

Amid this, there was a glimmer of positivity as the NAB Business Confidence index marked a second consecutive monthly increase in July. However, the index's reading of +2 remains considerably beneath its historical average. Of concern within the details was the sharp rise noted in labor costs, along with parallel increases in purchase costs.

These escalations were likely instigated by an elevation in the minimum wage - substantiating our expectation for another rate adjustment from the RBA before the year concludes.

China trade data and implications

Compounding the challenges of the day, China's trade data unveiled a third successive monthly decline in exports during July, coupled with a fifth continuous month of diminishing imports. This serves as a cautionary signal preceding the forthcoming release of Chinese inflation data, anticipated to exhibit a YoY contraction of -0.5% for July.

The ASX 200 market movements today

Health sector

After a tough session yesterday, the Health Sector bounced back today, led by CSL.

  • CSL added 0.71% to reach $264.30, displaying strength before its upcoming earnings report next Tuesday
  • Estia Health extended gains by 0.5% to $3.10, building on the positive momentum from its recent agreement to be acquired by Bain Capital at $3.20 per share

Mining sector

A 10% plunge in the share price of Corondo Global to $1.49 after its disappointing earnings update weighed on fellow coal miners.

  • New Hope fell 1.2% to $5.40
  • Whitehaven Coal fell -0.5% to $6.95
  • Fortescue gained 1.64% to $21.39, looking to end its three-week losing streak

Financial sector

The big banks are trading modestly higher ahead of the release of CBA's FY23 earnings report tomorrow morning.

  • CBA gained 0.47% to $102.32
  • NAB gained 0.46% to $28.08
  • ANZ added 0.04% to $25.31
  • Westpac fell 0.32% to $21.76.

ASX 200 technical analysis

The ASX 200's promising rally that extended into late July, reaching a high of 7472, abruptly halted last week as a sharp reversal took place. To reignite its upward momentum, the ASX 200 needs to successfully reclaim the resistance level situated at 7360/90. This resurgence is pivotal for the index to mount another effort to breach the year-to-date high of 7567.

Otherwise, range-bound trading conditions are set to continue.

ASX 200 daily chart

Source: TradingView

  • TradingView: the figures stated are as of August 8, 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.

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