Aust stocks in holding pattern at financial year’s end

Jacob Shteyman | June 30, 2023

The local share market is trading sideways to end the first half of a calendar year in which it has struggled to break out of a tight range.

With a few hours of trading left on Friday, the benchmark S&P/ASX200 index was down 1.2 points, or 0.02 per cent, to 7,193.7. The broader All Ordinaries was down 0.7 points, or 0.01 per cent, to 7,388.9.

The bourse is up 2.2 per cent since the beginning of 2023, but in the last three months has bounced around listlessly between resistance at 7390 and support at 7055.

“Until the ASX200 sees a sustained break of either of these levels, further sideways-range trading is expected,” IG markets analyst Tony Sycamore said.

Growth-sensitive stocks were among the ASX’s best performers thanks to resilient US economic data raising investor confidence it could avoid a recession, eToro market analyst Josh Gilbert said.

After Thursday’s strong retail sales data raised the prospects of another Reserve Bank rate hike, he predicted investors will be turning their attention to manufacturing data out of China.

“Manufacturing has struggled to gain traction so far this year with limited stimulus from authorities, and today’s data may highlight that once again,” Mr Gilbert said. 

“This will be a negative for local miners who are hoping to benefit from an increased resource demand that’s yet to manifest under China’s plan for economic recovery.”

The 11 official ASX sectors were mixed, with five up and six down.

Of the heavyweight miners, BHP was up 0.4 per cent to $45.11, Fortescue Metals down 0.1 per cent and Rio Tinto flat.

The big banks all slid with CBA and ANZ down 0.2 per cent, while NAB and Westpac retreated 0.3 per cent.

Downer EDI rose 3.2 per cent after sealing a $4.6 billion contract with the Queensland government to design and manufacture 65 six-car trains for the state’s new passenger fleet.

Worley rose one per cent to $15.79 after the energy and resources consultancy announced the appointment of former Chevron vice president Joe Geagea to the board.

AGL climbed 0.8 per cent despite the Australian Energy Regulator launching Federal Court proceedings against the company for failing to provide backup electricity services at its Bayswater and Loy Yang A generators between 2018 and 2020.

Bubs sank 5.6 per cent after the baby formula maker dropped its China revenue forecast to the lower end of its previously predicted range of $13.5 million to $13.8 million.

Storage King owner Abacus fell 4.9 per cent after going ex-dividend, while plus-size fashion brand City Chic soared 9.1 per cent to 36c.

Cancer immunotherapy developer Imugene jumped 7.9 per cent to 96c after its HER-Vaxx therapy was found to have induced antibodies correlated with tumour reduction, resulting in “statistically significant overall survival benefit”.