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Morning Bell 25 August

Sam Kanaan
August 25, 2023

Wall St fell sharply on Thursday, despite a tech rally which was led by a stronger than expected results from chipmaker Nvidia. The S&P 500 finished the day 1.35% lower, which was followed by the Dow Jones and the tech heavy Nasdaq losing 1.08% and 1.87% respectively.

Nvidia’s share price reached an all time high after its revenue and earnings significantly exceeded analysts’ expectations. The tech giant has also raised guidance with analysts’ predicting third quarter revenue to climb to $16 billion US dollars.

The S&P500’s information technology sector performed poorly on Thursday, ending the day down 2.15%. Shares of major tech companies such as Amazon and Apple finished lower by 2.7% and 2.6%.

Over in Europe, markets ended lower on Thursday as tech stocks fell by 2.3%. The STOXX600 ended the day 0.4% lower, with the financial services sector slightly offsetting losses, gaining 0.5%. Germany’s DAX closed 0.68% lower while the French CAC also ended the day 0.44% lower. This was slightly offset by the UK’s FTSE 100 which ended 0.18% in the green on Thursday.

Locally yesterday, the ASX 200 closed 0.47% higher on the back of strong results from the info tech sector which finished the day 4.2% higher. This was further supported by the financial sector and energy sector closing the day 1.04% and 0.89% higher respectively. This was offset by the consumer staples sector which closed 1.09% lower on Thursday.

What to watch today:

  • The Australian share market is set to open lower, with the SPI futures suggesting a fall of 1.28% at the open this morning.
  • On the commodities front this morning,
    • Oil is up by 0.1% to 78 US dollars and 96 cents a barrel after deteriorating economic situations in China.
    • Gold is up 0.15% higher to 1915 US dollars an ounce as markets have scaled back bets on further tightening from the Federal Reserve.
    • And iron ore is up 2.22% to 115 US dollars a tonne after renewed bets of stronger demand from steel producers.

Trading Ideas:

  • Bell Potter maintains a buy rating on Alkane Resources (ASX:ALK) and maintain a price target of $1.05 on the company after Alkane’s underlying NPAT grew 19% to $42.1m on 5% growth in gold production. Bell Potter’s analyst says that with upside of 57.9% from the closing share price, the buy rating is maintained in accordance to the rating structure.
  • And Trading Central has identified a bullish signal in Tabcorp Holdings (ASX:TAH), following the formation of a pattern formed over 20 days, which is roughly the same amount of time the share price may rise form the close of $1.09 to the range of $1.13-$1.15, according to the standard principles of technical analysis.

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