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ASX falls as Megellan and CIMIC plunge; China cuts benchmark loan rate - ABC News

ASX Nears 9,000 - What’s Fuelling the Rally

On Thursday, 21 August 2025, the S&P/ASX 200 officially closed above 9,000 points for the first time inching up 1.1% to 9,019.10. This milestone was driven by widespread strength across sectors, especially in financials, industrials, and consumer discretionary, powered by upbeat corporate earnings and supportive rate‑cut expectations.

However, the jubilation was short‑lived: markets retreated the next day, sliding about 0.57% to around 8,967, as some post‑earnings profit‑taking and underwhelming results triggered a pullback.

Must-Watch ASX Stocks (Potential Buys)

Zip (ZIP)

• Why: Delivered a blockbuster result EBITDA more than doubled to A$170.3M, driven by a 41.6% rise in U.S. transaction volume. Management is eyeing a U.S. Nasdaq listing, while maintaining its Australian listing.

• Play: Strong growth narrative + optionality from dual listing great potential for momentum traders.

Guzman y Gomez (GYG)

• Why: Crossed A$1 billion in annual sales for the first time; same‑store sales rose ~9.6%, and profits turned positive (~A$14M). However, shares tumbled over 20% on concerns around U.S. performance and early FY26 softness.

• Play: Could represent a buying opportunity amid sentiment‑driven weakness.

Sonic Healthcare (SHL)

• Why: Slumped sharply on disappointing earnings, yet Bell Potter called it a potential “bargain buy.”

• Play: A value‑oriented turnaround candidate keen eyes on upcoming earnings outlook.

Morgan Stanley's Spotlight Picks

These are identified as investor‑focus drivers this reporting season.

Quick Trade Ideas & Strategy Picks

Momentum Picks:

• Zip (ZIP) – Growth with optional upside from dual listing.

• Super Retail Group & Brambles – Both posted stellar earnings moves and broke multi‑year highs during the breakout rally.

Value / Reversal Trades:

• Sonic Healthcare (SHL) – Falling knife scenario flagged by brokers.

• Guzman y Gomez (GYG) – Large sales base, sentiment‑driven dip.

Blue-Chip Plays with Catalyst Watch:

• CSL, IAG, Woolworths, Telstra, Stockland strong sector plays with upcoming events or valuations that could re‑rate.

Long-Term Posture & Broader Themes

• Two-thirds of ASX 200 companies are hitting earnings forecasts; a modest 13% are beating, while 20% are missing, highlighting mixed fundamentals.

• Some stocks like CSL and James Hardie endured big sell‑offs (20–28%) after strategic missteps, underscoring heightened volatility and market sensitivity to surprises.

• Morgan Stanley’s rotation away from CBA (valuations stretched) toward ANZ and Westpac paint a tactical shift among banks.

Trade Commentary Wrap

Zip stands out for immediate momentum and optionality must-watch. Guzman y Gomez and Sonic Healthcare offer compelling contrarian plays amid oversell. CSL, IAG, WOW, Stockland, Telstra serve as solid core holdings with catalysts or defensive strength.

$SPDR® S&P/ASX 200 ETF(STW.AU)$

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Disclaimer: This article is provided for informational purposes only and does not constitute financial, investment, legal, or tax advice, nor the solicitation of any offer to buy or sell securities. The views expressed are those of the author and do not account for individual financial circumstances. Investing involves risk, including the potential loss of principal. Past performance is not indicative of future results. You alone are responsibl