The Match Out: Stocks bounce as bond yields ease

Some respite across the ASX today with the market bouncing from the bottom of its trading range despite a fairly brutal night across material and energy stocks, both sectors lagged today but the slack was more than taken up by interest rate sensitive names, property stocks enjoyed the pullback in US bond yields which flowed through to our own bond market today while Tech rebounded nicely from an aggressive 3-week, 13% pullback that has improved the risk/reward materially in the number of the large cap names.

• The ASX 200 finished up +35pts/ +0.51% to 6925.
• Property (+2.10%), IT (+1.73%) and Communications (+1.37%) led the line.
• Energy (-0.89%), Consumer Discretionary (-0.31%) and Materials (-0.16%) the weakest links
• Interesting to see Oil/Gas stocks bounce well from early weakness, they had pre-empted a pullback in the oil price and clearly attracted some buyers on the gap lower, Woodside (ASX: WDS) finished down -0.78% however it was down 2.78% at its lows, while Santos (ASX: STO) fell a more benign -0.4%.
• Lithium Miners fell after JP Morgan downgraded on oversupply concerns – arguably, the horse has already bolted!
• They cut 2023-27 lithium price forecasts by about 10-40% saying the market will be oversupplied out to 2030
• Pilbara Minerals (ASX: PLS) -2.72%, Mineral Resources (ASX: MIN) -2.92% while IGO Ltd (ASX: IGO) -3.98% was hit hardest as they moved to a sell equivalent.
• Gold stocks were on the other side of the coin with Northern Star (ASX: NST) +4.72% upgraded to a buy equivalent while Evolution (ASX: EVN) +2.84% also bounced.
• Newcrest (ASX: NCM) +1.76% announced a special dividend of US$1.10 as part of their deal with Newmont (NYSE: NEM) – this was expected with the stock trading ex on the 18^th October, with the currency conversion happening same day. At current spot rates on AUD this equates to $A1.72
• Technology stocks had a better session after a tough period – Xero (ASX: XRO) +2.68% and Altium (ASX: ALU) +1.55% to finish at $42.60, the IT sector locally had pulled back more than 13%.
• Property stocks also enjoyed some bond yield relief, the Aussie 3-year off 9 bps today at 4.04%, Dexus (ASX: DXS) +2.52% & Goodman (ASX: GMG) +2.59%.
• PEXA Group (ASX: PXA) -1.8% is moving ahead with the acquisition of UK conveyancing technology company Smoov for ~$42m, paid for from cash balances and existing debt, Smoov has ~7% of remortgage and 3% of the home sales market in the UK. 
• Audinate (ASX: AD8) +0.98% successfully raised $20m through the SPP with some scale back for smaller investors. They now have an extra $70m in the bank to drive growth. The raise completed at $13, the stock closed today at $13.34.
• SRG Global (ASX: SRG) +4.96% secured a 10-year extension to their NZ Transpower contract, worth $NZ130m, adding to ~$55m of contracts already won since 1 July
• Iron Ore edged +0.76% higher in Asia, Fortescue (ASX: FMG) was flat however its been incredibly resilient during this recent bout of market volatility.
• Gold benefitted from a lower $US, the dollar index back below 107 trading 106.54 at our close, spot Gold +$US5 to $US1827.
• Asian stocks were higher, Hong Kong up 0.56% & Japan put on 1.9%, while China came back online and edged up +0.10%
• US Futures are down ~0.10%

ASX 200 chart - intraday 

ASX 200 chart - daily 

Broker moves

• Alumina Raised to Buy at Citi; PT A$1.30
• Northern Star Raised to Overweight at JPMorgan; PT A$11.50
• Chalice Mining Raised to Neutral at JPMorgan; PT A$2.30
• Arafura Rare Earths Cut to Neutral at JPMorgan
• Sims Raised to Neutral at JPMorgan; PT A$13
• Pilbara Minerals Cut to Neutral at JPMorgan; PT A$4.50
• Core Lithium Cut to Underweight at JPMorgan
• IGO Cut to Underweight at JPMorgan; PT A$10.40
• Clinuvel Rated New Buy at Bell Potter; PT A$24
• Aussie Broadband Cut to Accumulate at Ord Minnett; PT A$4.15

Major movers today 

Enjoy the night
The Market Matters Team

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