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The ASX 200 has now rallied from early losses to close near its highs for five consecutive sessions, after recovering an early 50-point deficit on Tuesday to end the session flat. The miners bounced strongly to close higher despite crude oil trading ~5% higher, with Evolution Mining (+3.2%), South32 (+2%), Regis Resources (+2%), Sandfire (+1.5%), and BHP Group (+0.6%) catching our eye as a slow but steady bid tone surfaced across the gold and copper names. These miners were helped by a recovery in gold (+0.5%) and copper (+1.5%) during our trading session as the $US edged lower ahead of the important US CPI inflation data.
The volatility continued in the semiconductor space with the Korean KOSPI trading in another ~8% trading range before ending the session flat. After initially falling more than 5%, the index reversed higher, led by SK Hynix, which reversed an intraday loss of almost 9%, which briefly extended its two-day plunge to more than 20%, before closing ~4% higher. Samsung Electronics rose +3.3%, leading the KOSPI into positive territory on speculation of a potential US share sale, although the company later denied the reports. We’re swimming with sharks here, but we believe the sector has bottomed at least for the foreseeable future:
- Shawn’s Trading Ideas bought the Global X Semiconductor ETF (ASX: SEMI) yesterday for exposure to a semiconductor turnaround.
The pivotal US CPI came in cooler than feared overnight, sending bonds and stocks higher: Consumer prices dropped for the first time in six years, with consumer prices falling 0.4% in June, pulling annual inflation down to 3.5%, well below expectations for a 0.2% monthly decline and a 3.8% annual reading. Core inflation is now running at 2.6% annualised, giving the Fed some breathing space in our view.
Overseas indices were strong overnight following a soft US inflation print and President Trump shelving his 20% fee for Hormuz cargo. In Europe, the UK FTSE (+0.3%) and German DAX (+0.1%) both reversed early losses to close higher. In the US, the NASDAQ led the line, advancing +1.1% while the Russell 2000 small-cap index ended the session up +0.4%.
- The SPI futures are calling the ASX200 to open up +0.6% this morning following the strong session on Wall Street, and a $1.30 gain by BHP Group (BHP) in the US.
MM remains bullish towards the ASX200 around 8800
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