ASX 200 afternoon report: May 8, 2023

The ASX 200 trades 52.5 points (0.73%) higher at 7272.5 at 3:00pm AEST.

A positive lead from Wall Street on Friday night saw the ASX 200 add a quick-fire 72 points (1%) to a high of 7292.4 this morning - the majority of which it is holding onto with just under an hour of trading left in the session.

The better session on Wall Street came as jobs and earnings reports showed the US economy remained resilient. The rally was also supported by talk of a short-selling ban on US banks, which appears to have, for now, ended the latest episode of the US banking crisis.

For the Aussie banks, a better-than-expected earnings result from Westpac, including NPAT of $4bn (vs $3.8bn expected), saw its share price add 2% to $21.78. NAB gained 1.43% to $26.96, and CBA gained 0.70% to $96.79. ANZ fell 0.3% to $23.76. But Locally, economic data released on 8th May was mixed.

The NAB Business Confidence index increased by 1 point to zero, it's highest reading since January. However, building approvals fell -0.1% in March, which means the March quarter was the weakest for building approvals since 2012. The lack of new supply is concerning, with record levels of demand from migration set to come.

A 4.33% rally in the price of crude oil on Friday to above $71.00 boosted the ASX Energy sector looking to end a three-week losing run. Heavyweight Woodside added 3% to $34.10, Beach Energy added 2.5% to $1.45, Santos added 1.7% to $7.28. Gains also for coal miners as New Hope Coal added 3.9% to $5.27, and Whitehaven Coal added 3.9% to $7.07.

Lynas Rare Earths surged 12% to $7.38 after it announced its license to operate in Malaysia is valid until January 1, 2024. Rio Tinto added 2.76% to $112.39, Fortescue added 1.83% to $20.62and BHP group added 1.73% to $44.81.

Lithium stocks surged following a bullish broker report that noted a 30% bounce in China carbonate prices and a 20% bounce in hydroxide prices, likely marked a turning point for lithium markets. Core Lithium gained 7.5% to $1.04. Iluka Resources added 5.55% to $11.60. Lake Resources added 6% to $0.53c, and Pilbara Minerals added 4.55% to $4.60.

ASX 200 technical analysis

The ASX 200 fell 3% in the first week of May at last weeks 7141 low.

Should we see another dip in the coming weeks, there is a strong layer of support between 7100 and 6900 coming from the 200-day moving average, uptrend support and year-to-date lows.

Aware that should the ASX 200 see a sustained break below 6900, there is little in the way of chart support until 6400.

ASX 200 daily chart