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Morning Bell 23 March

Paulina Peters
March 23, 2022

The local market was back in the green yesterday, up 0.9% with the materials and energy sectors boosting the market. Overall, the market was mixed, with six of the 11 industry sectors closing lower, with the tech sector down the most.

Looking at the ASX200 leaderboard, Liontown Resources (ASX:LTR) was the best performer, up 6.3%, followed by AVZ Minerals (ASX:AVZ) and BHP Group (ASX:BHP), which added 5.1%. Computershare (ASX:CPU) posted a solid gain of 4.3%. One of the tailwinds helping Computershare recently is the outlook for rising interest rates, which will help increase its margins. On the flipside, tech shares were amongst the worst performers, with Block (ASX:SQ2) and Life360 (ASX:360) giving up some of their gains from the prior session.

The most traded stocks by Bell Direct clients yesterday, they included Commonwealth Bank (ASX:CBA), Woodside Petroleum (ASX:WPL) and Allkem (ASX:AKE).

Moving to the US, as at the time of recording, all three benchmarks are in the green as investors digest Federal Reserve Jerome Powell’s latest rate hike comments. Goldman Sachs on Monday upped its forecast to 50 basis point hikes at the May and June Fed meetings.

What to watch today:

  • The futures as at 7:30am AEDT, are suggesting that the Aussie share market is set to open 0.4% higher this morning.
  • Economic news wise, the manufacturing and services flash PMI for March will be released today. PMI stands Purchasing Managers’ Index which is essentially an index of the prevailing direction of economic trends in the manufacturing and service sectors. The flash PMI today is a forward-looking estimate of the final PMI, which is set to be released next week.
  • In commodities, the oil price was mixed, currently trading down about 0.8%. It now looks unlikely that the European Union will pursue an embargo on Russian oil.
  • The gold price slipped to a near one-week low off the back of Federal Reserve Jerome Powell’s hawkish stance, which sent Treasury yields higher. Now gold is highly sensitive to rising US interest rates, as they increase the opportunity cost of holding non-yielding bullion.
  • Seek (ASX:SEK), Myer Holdings (ASX:MYR) and Supply Network (ASX:SNL) are set to go ex-dividend today.

Trading Ideas:

  • Bell Potter have maintained its BUY rating on Nickel Mines (ASX:NIC) and have lifted its price target by 7% to $1.88. The comes as PT Oracle Nickel Industry, the operating entity housing the Oracle Nickel RKEF project, has been granted material corporate tax relief. This removes an expense of ~US$50 million per annum from its estimates for ten years. Now NIC closed about 1.5% higher yesterday to $1.29, which implies about 46% share price growth in a year.
  • Trading Central has a bullish signal on Pilbara Minerals (ASX:PLS), indicating that the stock price may rise from the close of $3.00 to the range of $3.40- $3.55 in the next 24 days according to standard principals of technical analysis.

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