Market wraps 23rd June 2022

Morning Bell - Paulina Peters

Our local market closed slightly lower yesterday, down 0.2% or 15 points to 6,508, despite the rebound we saw over on Wall Street.

The market was mixed. The utilities sector pushed 2.1% higher, supported by gains in APA Group (ASX:APA). Energy stocks also rallied, like Woodside Energy (ASX:WDS), Beach Energy (ASX:BPT) and Santos (ASX:STO). Meanwhile tech and consumer discretionary stocks led the losses came under pressure.

The best performing stock was Coronado Global Resources (ASX:CRN), which managed to add 7.5% - despite its slump on Tuesday, after the Queensland government announced that there would be increased royalties on coal sales. Also performing well was Ampol (ASX:ALD) following Morgan Stanley retaining its overweight rating and lifting its price target to $39. On the flip side, the worst performers included St Barbara (ASX:SBM), Core Lithium (ASX:CXO) and Lake Resources (ASX:LKE), all down over 13%. Also, Crown Resorts (ASX:CWN) announced news that it had received regulatory approval to start its gaming operations at the Crown Sydney casino, but as the stock is no longer listed on the Aussie market as of last week, following its approval to be taking over by US firm Blackstone, the market couldn’t react.

The most traded stocks by Bell Direct clients yesterday was Stanmore Resources (ASX:SMR), Lake Resources (ASX:LKE), Amcor (ASX:AMC) and Seven West Media (ASX:SWM).

In the US, all three benchmarks closed slightly lower, in a choppy session as markets struggled to sustain a rebound from earlier in the day.

What to watch today:

  • If you go by the SPI futures, our local market is set to open 0.36% higher.
  • Economic news wise, S&P Global Manufacturing and Services Flash PMI for June will be released. This is a forward-looking estimate of the Purchasing Manager’s Index, exemplifying economic trends in the manufacturing and services sectors.
  • In commodities:
    • Oil prices came under pressure as investors worry that rate hikes by the US Fed could push the US economy into a recession, therefore dampening demand for fuel.
    • The gold price pushed higher given these renewed fears of a recession – therefore boosting the safe-haven’s appeal.
    • The spot iron ore price is currently trading at US$117 a tonne, that’s down 20% from its previous highs in early June. So keep watch of iron ore miners like BHP Group (ASX:BHP) and Fortescue Metals (ASX:FMG).
  • Leo Lithium will be debuting on the ASX today. It will be trading under the ticker code LLL.

Trading Ideas:

  • Citi have maintained its Buy rating on BHP Group (ASX:BHP) with a price target of $50. At BHP’s current share price of $41.03, this implies 22% share price growth in a year.
  • Trading Central has a bearish signal on Aurizon Holdings (ASX:AZJ) indicating that the stock price may fall from the close of $3.75 to the range of $3.33 - $3.41 in the next 28 days according to standard principals of technical analysis.