ASX 200 to retest 7,200? Gold miners rally, lifts Aus shares 0.8% at noon

Australian gold miners and banks offset the fall in information tech as investors ponder if China’s covid policy outweighs stimulus support in a slowing economy.

Despite BHP (ASX:BHP) shares down 9 per cent to $43.70, it’s actually up 2.7 per cent after its Woodside Petroleum (ASX:WPL) entitlement while shares in Woodside are flat.

A proxy to the strength of the economy came in at a miss with construction work completed, falling 0.9 per cent in the March quarter versus a 1 per cent rise after a 0.4 per cent fall in the December quarter.

Investors have been combing through a raft of negative headlines as they look to determine if the sell off has more to go and if inflation has peaked.The Nasdaq composite has tumbled 30 per cent from its peak in November last year, and when you compare this to the fall at the start of the pandemic and the 50 per cent slump which ended in March 2009, investors are in flux as to how to navigate their next move.

However, the latest economic prints are showing signs that the housing market is slowing down though most analysts are waiting for a sustained rally to retest lows before declaring a bottom to the market.

On a light volume day, the ASX 200 is within reach of a key short-term chart resistance at 7,200.

Heavy lifters include Telstra (ASX:TLS) up 1.2 per cent to $3.91, National Australia Bank (ASX:NAB) adding 2.6 per cent at $31.89, Oceanagold (ASX:OGC) rallying 8.3 per cent to $3.27, Northern Star (ASX:NST) rising 3.3 per cent at $9.18, and Evolution Mining (ASX:EVN) trading 5 per cent higher to $3.88.

Cettire (ASX:CTT) is consolidating after its 23.8 per cent gain in the past 3 days, trading 7.2 per cent lower to 58 cents and Grange Resources too (ASX:GRR) with shares down 8 per cent to $1.55, after rallying 17 per cent in the same period.

At noon, the S&P/ASX 200 is 0.8 per cent or 57 points higher at 7,186.

The SPI futures are pointing to a rise of 58 points.

Local economic news

During the March quarter, 66 per cent of Australian households owned their own home with or without a mortgage, while 31 per cent of households rented their home, according to the Australian Bureau of Statistics. Average weekly housing costs were $493 for owners with a mortgage, $54 for owners without a mortgage, and $379 for renters.

Company news by Lauren Evans

Worley (ASX:WOR) has received an engineering contract from Heartwell Renewables LLC for the renewable diesel plant in Hastings, Nebraska. Separately, Worley has also received a contract from Borouge 4 LLC for the fourth expansion of Borouge’s polyolefins complex in Ruwais, United Arab Emirates. Shares are trading 3.1 per cent higher at $15.21.

Bega Cheese (ASX:BGA) has launched an expression of interest for the sale and leaseback of its property at 1 Vegemite Way, Port Melbourne. The property is where Bega Cheese manufactures vegemite, peanut butter and other products, around 5 kilometres from the Melbourne CBD. Shares are trading 0.2 per cent higher at $4.77.

RareX (ASX:REE) has announced encouraging visual results at its Cummins Range rare earths project in Western Australia. Results showed mineralisation 250 metres down-dip from the best intercept at Cummins Range. Shares are trading 3.8 per cent higher at $0.082.

Sayona Mining (ASX:SYA) has entered a trading halt ahead of a $190 million capital raising at 18 cents, expecting to release more details this week. On Tuesday, the emerging lithium producer confirmed the technical and financial viability of its North American Lithium project in Quebec, Canada, following a pre-feasibility study. Shares last traded at $0.20.

ALS (ASX:ALQ) has reported a 24 per cent increase in revenue for the full year to March 31 thanks to a strong performance from Life Sciences and commodities. ALS said price increases have allowed the division to manage inflationary pressure to date but the environment remains volatile. Shares are trading 3.1 per cent higher at $12.15.

Fisher and Paykel (ASX:FPH) withheld guidance for the 2023 financial year after profit fell 28 per cent in the full year to March 31, while revenue fell 15 per cent to $NZ1.7 billion. Shares are trading 0.3 per cent lower at $18.66.

What else is on watch?

Annual meetings continue with Alumina (ASX:AWC), shares are trading 0.4 per cent to $1.66, and Costa Group (ASX:CGC), shares are trading 4.8 per cent higher at $3.05.

Citi rates Premier Investments (ASX:PMV) as neutral with a price target of $29. The broker keeps a positive view on the retail sector despite depressed expectations amid higher fuel prices and a rising interest rate environment. Citi believes that Smiggle and the fashion brands will be reopening beneficiaries, while Peter Alexander is expected to hold up well. Shares are trading 0.8 per cent lower at $22.29.

The Lottery Corp (ASX:TLC) now has a market capitalisation of around $10.3 billion after splitting from Tabcorp (ASX:TAH). Morgan Stanley has initiated coverage on The Lottery Corp as overweight with a price target of $5.15. Shares in Lottery Corp are trading 0.7 per cent higher at $4.74.

Challenger (ASX:CGF) is trading 4.3 per cent lower at $7.22 amid JP Morgan cutting its rating to underweight with a price target of $6.90.

Best and worst performers

The best-performing sector is materials, up 1.7 per cent. The worst-performing sector is information technology, down 2.4 per cent.

The best-performing stock in the S&P/ASX 200 is Evolution Mining (ASX:EVN), trading 4.9 per cent higher at $3.87. It is followed by shares in Costa Group (ASX:CGC) and Nufarm (ASX:NUF).

The worst-performing stock in the S&P/ASX 200 is Pro Medicus (ASX:PME), trading 6.4 per cent lower at $39.35. It is followed by shares in Tabcorp Holdings (ASX:TAH) and Block (ASX:SQ2).

Commodities and the dollar

Gold is trading at US$1,863.46 an ounce.
One Australian dollar is buying 70.93 US cents.
Iron ore is 4.0 per cent lower at US$130.50 a ton.
Iron ore futures are flat.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Australian Bureau of Statistics