ASX200 falls fast for a second session after inflation steals the air in the room
7 of 11 ASX sectors lower, with InfoTech the only standout in the plus column
Small caps led by Iris Metals and Bellavista Resources
Local markets have spent Thursday fleeing from Wednesday’s “red-hot” inflation read, with the benchmark down 0.3% after clawing its way back from a shocking start to the day.
Via ASX
May’s CPI spike ambushed ASX investors for second session.
The benchmark fell –0.7 % on Wednesday, and yet again, just when the market looked fit for new a new cycle and fresh highs, we were gifted a great big not-all-that-surprising inflation package which sucked the benchmark back to boring old earth.
This morning when the bell rang, the local index dived off the mizzen mast faaling some 120 points (-1.6%) to a one-month low of 7654 before some brave buyers got back into the game and a support strut for the market emerged.
Anyhoo. Inflation rose in May. Investors slept. Rome was singed. The rate-sensitive names copped most of the hate mail following the surprisingly toasty inflation print.
IG Markets senior analyst Tony Sycamore says Wednesday’s rise in the RBA’s preferred measure of inflation – the Trimmed mean – to 4.4% in May puts it on track to comfortably beat the RBA’s own forecast of 3.8% YoY for June.
“This means it will likely take a significant and unlikely downside surprise in June inflation data to prevent the RBA from delivering a fourteenth-rate hike to 4.60% before year-end,” Tony says.
The ASX200 and its interest rate-sensitive sectors are not big fans of higher interest rates.
Case in point: The ASX200 Real Estate sector, which, after its two-day tumble, is trading 5% below Tuesday’s high.
Leading the falls today, Mirvac (ASX:MGR) crashed over 5.5%, GPT Group (ASX:GPT) slipped 5.87% to $4.01, and Stockland (ASX:SGP) lost 5.80% to $4.14.
“The RBA has continually voiced its unease over high inflation and put the market on notice in Mid-June when it noted that the Board discussed the option to hike rates but not the option to cut rates.
“The return of the comment that the RBA will do “what is necessary” to return inflation to target was viewed as an additional hawkish development,” according to Mr Sycamore.
There was however, relief for the army of “big bank” short sellers as the ASX200 Financial sector extended its fall from Tuesday’s fresh seventeen-year high, according to IG data.
“Higher interest rates dampen the appetite for credit and can lead to more mortgage holders falling behind on their repayments, leading to higher bad debts,” Tony says.
Of the big banks on Thursday, National Australia Bank (ASX:NAB) fell 1.63% to $35.70, Westpac (ASX:WBC) lost 1.5%, Commonwealth Bank (ASX:CBA) fell 1.4% and Australia and New Zealand Banking Group (ASX:ANZ) lost 1.1%.
The Federal government’s big spending budget, announced in mid-May, which included rebates and other cost-of-living relief measures for households, has driven a decent rebound in some of the local consumer-facing stocks.
“However, the prospect of higher interest rates has seen a chunk of those gains unwound – for the week, Adairs (ASX:ADH) is trading 6.46% lower at $1.81.
JB HiFi (ASX:JBH) has lost 5.33% this week to $61.09, and Harvey Norman Holdings (ASX:HVN) is trading 5.13% lower this week at $4.24.
“And despite being largely insulated from the effect of higher interest rates and a +3.2% rally in the price of iron ore overnight to $106.60 the big miners have offered little in the way of shelter from the storm,” Tony fears.
Of the big name miners Rio Tinto (ASX:RIO) bucked the trend to rise 0.65%, but after that all the dish-heroes were in retreat: Mineral Resources (ASX:MIN) fell 1.31%, BHP (ASX:BHP) lost -0.62% to $43.07, and Fortescue (ASX:FMG) lost -0.21% to $21.58.
Finally, the Immutep (ASX:IMM) share price got smashed on Thursday and it doesn’t make too much sense.
Analysts at Wilsons Advisory, say punters have got the latest trail tests all wrong.
“The market has yet again misread Immutep and (this) should represent an obvious buying opportunity’’.
IMU released its Phase IIB trial results for its head and neck cancer treatment.
Perhaps even more bizarre has bee the recent breakthrough in Parkinson’s Disease from researchers in the states which highlight the use of anti-LAG3 molecules which IMU specialises in.
Immutep fell almost 50% this morning to 23 cents and is now down about 25%.
“With just one full trading session left in June, the ASX200 is now flat for the month after being up over 2% in the first two weeks of June. Technically, the ASX200 mustn’t see a daily close below uptrend support at 767-0ish, coming from the April 7492 low to keep the uptrend intact and avert a deeper pullback towards the 200-day moving average at 7457,” Tony added.
According to the ASX, the benchmark index has lost 0.5% over the last five days, but sits 2.25% below its 52-week high.
ASX Sectors on Thursday
Via ASX
The UNASX
Actually, we led Asia-Pacific equity markets lower on Thursday, with our sizzling inflation stoking regional fears of more
In Tokyo, investors also reassessed the outlook for Bank of Japan (BoJ) monetary policy after the yen fell again.
The Japanese currency, is at a 38-year low.
In mainland China bot the Shanghai and Shenzhen indices fell again. Both benchmarks are flirting afresh with four-month lows as more of the same disappointing economic data and even less of the fresh stimulus measures out of Beijing sapped what little confidence investors have with Chinese equities.
On Wall Street overnight, the S&P 500 up by 0.16%, the blue chip Dow Jones index barely made parity, up 0.04%, and the tech-heavy Nasdaq climbed 0.5%.
The big news in the states was Amazon’s busting through the US$2 trillion market cap mark for the first time, climbing some 4% over the course of the session.
US Futures on Thursday arvo in Sydney
Via Fox
Meanwhile, Dutch business confidence has put in a relatively cocky -2.4 in June, up from -2.8 in the previous month. Sadly however, -2.4% represents the Netherlands’ highest reading since May 2023.
Still, it’s Amsterdam’s 15 consecutive negative read for business confidence, and remains well below the 20 year average of -1.3.
And car sales in Thailand have crashed by almost 24% year-on-year to 49,870 units in May 2024, following a 21.49% slump in the previous month, that’s according to the Federation of Thai Industries (FTI). The unhappy read makes it 12 straight months of falling sales.
Someone’s always worse off than you.
ASX SMALL CAP LEADERS
Today’s best performing small cap stocks:
Swipe or scroll to reveal full table. Click headings to sort:
Code Name Price % Change Volume Market Cap AVE Avecho Biotech Ltd 0.003 50% 5,179,361 $6,338,594 AN1 Anagenics Limited 0.010 43% 712,831 $3,229,243 IBG Ironbark Zinc Ltd 0.004 33% 9,223,750 $4,781,618 MHC Manhattan Corp Ltd 0.002 33% 224,500 $4,405,470 RBR RBR Group Ltd 0.002 33% 2,745,022 $1,634,405 TMX Terrain Minerals 0.004 33% 448,000 $4,295,012 OCN Oceanalithiumlimited 0.039 26% 435,925 $1,676,372 IR1 Irismetals 0.320 25% 792,929 $34,051,420 SPX Spenda Limited 0.008 25% 11,854,126 $25,946,747 88E 88 Energy Ltd 0.003 25% 9,588,281 $57,785,344 AYT Austin Metals Ltd 0.005 25% 803,710 $5,296,765 HXL Hexima 0.010 25% 750,184 $1,336,317 HTG Harvest Tech Grp Ltd 0.021 24% 1,360,693 $13,801,583 BVR Bellavistaresources 0.210 24% 838,825 $13,339,747 DGR DGR Global Ltd 0.011 22% 607,035 $9,393,241 IG6 Internationalgraphit 0.088 22% 690,133 $13,936,200 1AG Alterra Limited 0.006 20% 1,215,610 $4,310,732 VFX Visionflex Group Ltd 0.006 20% 227,080 $7,084,956 AR3 Austrare 0.085 20% 649,627 $11,070,454 BBN Baby Bunting Grp Ltd 1.465 19% 2,083,316 $166,609,514 XRG Xreality Group Ltd 0.053 18% 254,580 $24,846,270 LIO Lion Energy Limited 0.020 18% 1,281,163 $7,428,622 FOS FOS Capital Ltd 0.235 18% 12,987 $10,761,228 ACW Actinogen Medical 0.048 17% 16,727,836 $110,005,022
Resources and exploration company Iris Metals (ASX:IR1) , with projects located in South Dakota and Western Australia has lifted on Thursday after dropping it’s FY24 annual report.
Since the start of the new financial year in April 2023, IRIS Metals Limited has progressed its exploration and related activities but says it has some irons in the fire for the year ahead.
Including ongoing Diamind Drilling (DD) at Beecher targets, Longview targets and Black Diamond extensions.
Metallurgical testing and geotechnical sampling are underway form mining feasibility studies.
Regional mapping and soil sampling programs have begun and will continue throughout the year ahead. These regional programs are planned to identify new pegmatites for future drill testing.
Iris also continues to assess and undertake due diligence on other South Dakota based tenure for acquisition.
The company has designed a drill program for the Tin Mountain Project with EXNI approvals expected in the next few weeks and an anticipated DD program to begin within the near term.
Baby Bunting (ASX:BBN) jumped 24% this morning after delivering a trading update to investors, which included news that total sales from 1 May 2024 to 24 June 2024 were up a modest 1.0% on pcp, and that the company’s existing $70 million NAB facility has been renewed for a further 3 years at existing pricing.
Harvest Technology Group (ASX:HTG) says it has deployed n additional 30 NSI (Nodestrea Integrated device) units to its defence partner, Guerrilla Technologies.
“Continuing orders from Guerrilla highlight the growing collaboration and trust between our companies. The new units will further bolster Guerrilla Technologies’ network and semi-autonomous field assets, enhancing their capability to manage sensitive operations in remote and challenging environments with unparalleled secure communications,” HTG informed the ASX.
Bellavista Resources (ASX:BVR) was up early on news that the company has firm commitments for an unbrokered $1.2 million cap raise to new and existing shareholders and institutional investors, at $0.15 per share – a handy 12% discount to the company’s recent close at $0.17 a pop.
Bastion Minerals (ASX:BMO) released happy news that it has found more high-grade rare earths at its Gyttorp project in Sweden. Assays confirmed TREE+Y up to 8.3% from actinolite skarn, in line with previously announced xPRF results from the site.
And Sheffield Resources (ASX:SFX) announced results from a ramp up of production and shipments from the Kimberley Mineral Sands owned Thunderbird Mineral Sands Mine in Western Australia, which saw production of approximately 825,000 ore tonnes in June 2024, and concentrate production of approximately 55,000 tonnes ilmenite concentrate and 13,000 tonnes zircon concentrate over the same period.
ASX SMALL CAP LAGGARDS
Today’s best performing small cap stocks:
Swipe or scroll to reveal full table. Click headings to sort
Code Name Price % Change Volume Market Cap CNJ Conico Ltd 0.001 -50% 90 3610290.912 CAQ CAQ Holdings Ltd 0.026 -47% 767,763 35171527.77 MAY Melbana Energy Ltd 0.035 -43% 86,448,823 205582450.3 BFC Beston Global Ltd 0.002 -33% 5,151,902 5991140.676 MTL Mantle Minerals Ltd 0.002 -33% 500,000 18592337.5 RIL Redivium Limited 0.002 -33% 1,249,412 8192564.427 MMM Marley Spoon Se 0.014 -30% 430,083 2354488.06 GES Genesis Resources 0.005 -29% 35,000 5479889.058 EQS Equitystorygroupltd 0.019 -27% 701,348 2833830.064 BP8 Bph Global Ltd 0.003 -25% 2,280 1586565.916 EDE Eden Inv Ltd 0.002 -25% 467,981 7356542.23 ENT Enterprise Metals 0.003 -25% 2,870,703 3538883.728 ME1 Melodiol Glb Health 0.003 -25% 11,982,839 707267.152 MTB Mount Burgess Mining 0.002 -25% 156,666 2596293.572 OAR OAR Resources Ltd 0.002 -25% 2,541,845 6444199.76 ODE Odessa Minerals Ltd 0.003 -25% 3,510,000 4173130.144 TMK TMK Energy Limited 0.003 -25% 1,022,382 27646447.89 VPR Voltgroupltd 0.002 -25% 2,006,732 21432416.42 ICR Intelicare Holdings 0.015 -25% 1,848,010 4696489.96 IMM Immutep Ltd 0.340 -22% 43,618,504 631886346.2 OAK Oakridge 0.070 -21% 3,000 2402813.812 PNT Panthermetalsltd 0.023 -21% 27,313 2527818.698 NSM Northstaw 0.012 -20% 1,038 2098136.76
TRADING HALTS
Axiom Properties (ASX:AXI) – pending an announcement by Axiom in relation to a proposed business acquisition.
Qualitas Real Estate Income Fund (ASX:QRI) – halt requested in relation to a proposed capital raising by QRI.
Saturn Metals (ASX:STN) – pending the release of an announcement regarding a capital raising.
Triton Minerals (ASX:TON) – pending the release of an announcement in relation to a material transaction concerning the divestiture of part interest in an asset.
Venture Minerals (ASX:VMS) – pending an announcement with regards to a proposed capital raising.
Infini Resources (ASX:I88) – ending an announcement regarding material exploration results at its Portland Creek Uranium Project.
IN CASE YOU MISSED IT
Everest Metals Corporation’s (ASX:EMC) bulk sampling program at its Revere gold and base metals project in WA has indicated the potential for the existence of a large orogenic gold system starting at surface and continuing at depth.
Many Peaks Minerals (ASX:MPK) has signed an agreement to purchase the Baga gold project from Atlantic Resources, adding a further 644km2 of prospective gold tenure in Cote d’Ivoire to its portfolio.
Fintech and digital solutions commerce solutions provider Ovanti’s (ASX:OVT) wholly-owned subsidiary iSentric has signed major omni channel development contracts with a top three commercial bank in Malaysia that are forecast to be worth ~$4.8m annually.
Pure Hydrogen (ASX:PH2) has executed a term sheet to supply a rear-loading hydrogen fuel cell-powered (HFC) waste collection vehicle to the City of Newcastle, NSW.
At Stockhead, we tell it like it is. While Everest Metals Corporation, Many Peaks Minerals, Ovanti and Pure Hydrogen are Stockhead advertisers, they did not sponsor this article.
The post Closing Bell: Abominable inflation has ASX in full retreat appeared first on Stockhead.
