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Morning Bell 27 June

Grady Wulff
June 27, 2023

Well looking at global markets overnight, US equities closed in the red, following a sell-off in technology companies, which have outperformed this year. The pullback in tech stocks saw the Nasdaq sharply drop, closing the session 1.16% lower. Meanwhile, the S&P500 fell 0.45% and the Dow slightly down 0.04%.

In Europe, markets closed mixed, with Germany’s DAX, the FTSE 100 and the STOXX 600 all closing the session down just 0.1%, while France’s CAC was in the green.

What to watch today:

  • The Australian share market is set to open higher this morning, with the SPI futures suggesting a 0.28% rise at the open.
  • In commodities,
    • Global oil prices were higher following news of an armed rebellion against Russian President Vladimir Putin. Prices rose as investors monitored a potential oil shortage.
    • The price of gold has rebounded further from a three-month as global economic uncertainties and political instability in Russia drove some safe-haven demand for metal.
    • And iron ore remains close to a two-month high as markets assessed concerns of lower demand against the possibility that the Chinese government will provide stimulus measures for its construction sector.
  • And today keep watch of Appen’s (ASX:APX) share price moments. The AI data services company faced further turbulence yesterday, with its share price plunging 12% on the release of an announcement outlining its CFO, Helen Johnson, has decided to stand down just two months after stepping into the role.
  • Also keep watch of Wesfarmers (ASX:WES), which rallied yesterday after the Australian conglomerate entered into a scheme implementation deed through its wholly-owned subsidiary, Australian Pharmaceutical Industries to acquire 100% of Silk Laser Clinics’ outstanding shares for $3.35 cash per share by way of a scheme of arrangement. The deal values Silk Laser Clinics at $180 million and the Silk board has unanimously recommended that shareholders vote in favour of the scheme.

Trading Ideas:

  • Bell Potter have downgraded their recommendation on DDH1 (ASX:DDH) from a Buy to a Hold, after the company announced that they entered into a binding Scheme Implementation Agreement. Perenti (ASX:PRN) will acquire 100% of the fully paid ordinary shares in DDH). Bell Potter have also downgraded their price target to the current implied acquisition price of $0.94 per DDH share.
  • And Trading Central have identified a bearish signal in Charter Hall (ASX:CHC) indicating that the stock price may rise from the close of $10.52 to the range of $9.30 to $9.60 over 57 days according to the standard principles of technical analysis.

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