Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

ASX 200 afternoon report: April 20, 2023

The ASX 200 trades flattish at 7366 at 2.00pm AEST.

Source: Bloomberg

The ASX 200 is trading flat after lunchtime today, continuing the quiet trading conditions seen during this week.

The local market appears tired after an impressive run higher from the March lows. With school holidays this week and an ANZAC holiday-shortened week next week, not even the release today of the highly anticipated RBA Review recommendations has sparked a reaction.

The key recommendations of the first RBA Review since the 1990s support a continuation of the 2-3% inflation target and fewer meetings followed by press conferences to explain the reasons behind its decisions.

The eight board meetings a year (from eleven) will mean less noise. The addition of six external board members, ideally with deeper connections to financial markets, will provide safeguards against future policy errors, including the RBA’s sadly misguided guarantee of no rate rises “until 2024 at the earliest.”

The guidance seems even more out of place considering the release of the RBA Board Meeting Minutes for April earlier this week, which confirmed that the RBA’s decision to pause its 350-basis point rate hiking cycle was a close call.

The hawkish tone in the minutes has the Australian interest rate currently pricing in a 25% chance of a 25bp rate hike to 3.85% at the next RBA Board meeting in May. Elsewhere similar considerations of more rate hikes weigh on traders’ minds, particularly after headline inflation in the UK inflation printed at 10.1% - above 10% for the seventh consecutive month.

Given that the outlook for monetary policy is pointing towards more rate hikes, not less it’s no surprise that the cyclical Materials sector has been the worst-performing sector today. Mineral Resources fell 5% to $80.08, Rio Tinto fell 2.82% to $119.72, BHP fell 2.36% to $46.14, and Fortescue fell 0.82% to $22.45.

The Energy sector has also fallen after the price of crude oil fell 2.35% overnight to $78.96 on concerns that higher interest rates will weigh on demand. Beach Energy fell 2% to $1.47, Woodside Energy fell 0.9% to $33.54, and Santos fell 0.9% to $7.06.

With bank dividend season looming next month, the financial sector is on track for its fourth week of gains led by the big banks. ANZ added 1.55% to $24.52, NAB added 1.52% to $29.05, Westpac added 1.35% to $22.53, and CBA added 1.36% to $100.72 after trading above $101 today for the first time since February.

Former BNPL poster child ZIP added 2.88% to $0.54c after it reported its March quarter revenues increased by 15% to $182.1 million. At the same time, some profit-taking drifted into the Lithium sector after its good run in recent week. Allkem fell 4.2% to $11.77, Pilbara Minerals fell 3.42% to $3.95, IGO fell 3.22% to $13.99, and Galan Lithium fell 2.6% to $1.13.

ASX 200 technical analysis

After holding support at 6900, the ASX 200 last week reached the 7350 target we first pinpointed on March 28 here. While we wouldn’t rule out further gains into month end, we aren’t interested in chasing the market higher here, mindful that May and June typically see a pullback in the vicinity of 3-5%.

ASx 200 daily chart

Source: TradingView
  1. TradingView: the figures stated are as of April 20, 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 Markets Ltd and IG Markets South Africa Limited. 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. See full non-independent research disclaimer and quarterly summary.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.