ASX 200 Preview: Materials Lead as Gold Strength Persists; Tech Drags on Gains

1. ASX 200 Opens Higher:

The ASX 200 opened higher this morning, tracking strong overnight gains on Wall Street as optimism grew over the resolution of the US government shutdown. The index is currently up 0.22% at 8,838.20 (10:47 am AEDT), extending its positive run this week.

The rally is being driven by Materials and Energy stocks, supported by firmer commodity prices and stronger sentiment in global resource markets. The top-performing local names are Mineral Resources Limited and Champion Iron Limited, up 8.48% and 4.03% respectively.

2. Wall Street Higher as Shutdown Deal Nears Completion

US equities ended mixed overnight, with the Dow Jones rising 1.18% to another all-time high, the S&P 500 up 0.21%, and the Nasdaq easing 0.25% amid profit-taking in large-cap technology stocks.

Investor confidence strengthened after the US Senate passed a funding bill to reopen the government, with President Trump voicing support for the bipartisan deal. The legislation now heads to the House for final approval, which is expected to formally end the shutdown within days.

Market breadth improved as investors rotated into defensives and cyclicals. Sector performance was led by Health Care (+2.33%), Energy (+1.29%), Consumer Staples (+1.20%), Real Estate (+1.08%), and Materials (+1.07%). Information Technology (–0.72%) was the only sector to finish lower.

3. Sector Performance — ASX

Six of eleven ASX sectors are higher in early trade, led by Materials and Energy.

Leaders: Materials (+1.12%), Energy (+0.89%), Health Care (+0.15%), Consumer Staples (+0.08%)

Laggards: Information Technology (–2.64%), Utilities (–0.79%), A-REITs (–0.25%)

Materials have gained 4.65% over the past week, continuing to benefit from rising gold prices and renewed investor interest in resources. In contrast, Technology remains under pressure, tracking the Nasdaq’s decline overnight as profit-taking hit large-cap growth names.

4. Commodity Watch

Commodities remain firm as investors position for improved global liquidity conditions.

Gold: US$4,130.62/oz (+0.35%)

Copper: US$5.05/lb (–0.54%)

WTI Oil: US$60.93/bbl (+1.40%)

Gold continues to trade above the US$4,100 mark, supported by safe-haven buying and central bank demand. Oil extended its recent rally to new monthly highs as supply constraints and a weaker dollar underpinned prices. Copper slipped slightly but remains elevated year-to-date amid steady industrial demand.

5. ASX Corporate Highlights

Broker Moves:

• Bendigo Bank (BEN): Downgraded to Underweight (from Equal-weight) by Morgan Stanley; target reduced to $10.00 (from $10.60).
• Megaport (MP1): Upgraded to Overweight (from Neutral) by JPMorgan; target raised to $16.70 (from $14.50).

Dividends Paid: Gowing Bros (GOW), Tasmea (TEA)

Ex-Dividend:

• ResMed (RMD) – $0.064
• Acorn Capital (ACQ) – $0.028
• Dominion Income Trust (DN1) – $0.591

6. What to Watch Today

Resources Momentum: Materials and gold miners remain in focus as spot gold holds firm above US$4,100.

Energy Strength: Oil’s 1.4% overnight rise suggests continued support for Woodside, Santos, and Beach Energy.

Tech Volatility: Local tech names may face further selling pressure following the Nasdaq’s decline.

Domestic Data: Investors will watch for updates on business confidence and lending data as indicators of broader economic momentum.

7. Kapitales Research Take

The ASX 200 continues to show resilience, with materials and energy leading gains as commodity markets strengthen. The end of the US government shutdown has provided a significant sentiment boost, though technology and utilities weakness may limit upside in the near term.

We expect the index to trade between 8,820 and 8,850 during the session, with resources and cyclicals driving direction. Overall, the market backdrop remains constructive as investors rotate toward defensive growth sectors ahead of year-end positioning.

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