The Match Out: Stocks down as “risk-off” prevails, Woodside rallies as stock overhang clears

James Gerrish

Market Matters

Aussie shares struggled from the get-go today and never really staged any meaningful recovery as traders went risk-off. Concerns around the rate of tightening in the US drove the weakness while Australia could see another rate hike on Tuesday, of up to 40 bps, according to ANZ Bank’s economist. The concerns meant the high growth Tech sector was the hardest hit, but despite the broad weakness, two sectors finished more than 1% higher.

  • The ASX 200 finished down -58pts/ -0.8% at 7175.
  • The Energy Sector (+3.06%) was very strong despite the broad weakness. Utilities (+1.13%) bounced back as well to be the only other sector in the green.
  • Tech (-2.47%), Healthcare (-1.83%) and Telcos (-1.57%) were the weakest links.
  • Australian trade data was out this morning with Exports up 1% MoM and imports down 1% MoM.
  • Wesfarmers (ASX: WES) -0.63%, managed to outperform the index today despite raising concerns around wages and inventory at their strategy day.
  • REA Group (ASX: REA) -3.28%, struggled with the tech sector but also failed to excite the market at their investor day. Listing volumes are falling plus listings are staying on the site for fewer days as the housing market cools. Management did set revenue growth expectations in the double digits still, despite the headwinds, talking up the peripheral parts of their business.
  • Woodside (ASX: WDS) +5.17%, a big overhang of stock was cleared this morning with JP Morgan squaring off 38 million shares at $29.15. The shares are largely South African holders of BHP, which were ineligible for the dividend paid in WDS shares that were completed this week, as well as smaller holders that opted to take the distribution in cash.
  • The sell-off in Lithium stocks eased today – Independence Group (IGO) +3.94% actually rallied while the edgier names in Pilbara (ASX: PLS) and Allkem (ASX: AKE) finished down -0.87% & -1.38% respectively
  • HALO (ASX: HAL) -6.82%, the recent IPO we’ve highlighted a few times now as being a disaster for a bunch of reasons hit new lows again today closing at 41c having listed on 22 April at $1.20. Participants in this IPO should be livid!
  • Iron Ore was 2% higher in Asia today though the miners finished down
  • Gold was up +0.15%/~$US2.5 to settle at $US1,849 at our close.
  • Asian stocks were also down today. Hong Kong was down -1.5%, Japan -0.2% & China was the weakest, down -1.6%.
  • S&P and Nasdaq Futures are both up 0.1%

ASX 200 chart

Broker moves

  • Silver Lake Raised to Outperform at Macquarie; PT A$2.10
  • Computershare Raised to Neutral at JPMorgan; PT A$25
  • Tabcorp Reinstated Equal-Weight at Morgan Stanley
  • BHP Reinstated Buy at Goldman; PT A$51.20
  • Origin Energy Cut to Sector Perform at RBC; PT A$6
  • BHP Cut to Neutral at JPMorgan; PT A$46
  • Little Green Pharma Cut to Hold at Canaccord
  • IGO Raised to Outperform at RBC; PT A$15.50
  • OZ Minerals Raised to Sector Perform at RBC; PT A$23.

Major movers today

Have a great night,

The Market Matters team.

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James Gerrish
Portfolio Manager
Market Matters

James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...

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