ASX Large Caps: Shares down 3pc in October, and RBA’s stern warning over social media

ASX ended the month of October more than 3pc lower
RBA warns that social media could lead to SVB-style collapse in Australia
The US Fed will convene for the first of its two-day meeting tonight

Local shares ended the last trading day of October flattish despite opening higher this morning. For the month, the benchmark ASX 200 index was down over -3.5%.

Today’s session began with a speech by Brad Jones, an assistant RBA governor, who told a press conference that the “emerging risks we are likely to confront over the next decade have a different complexion to those of recent decades”.

Jones listed risks we are likely to face such as sudden withdrawal of deposits sparked by social media, citing the demise of California-based Silicon Valley Bank earlier this year.

Many traders stayed on the sidelines as they await the result of the US Fed meeting, which will convene later tonight, with a rates decision announced on Thursday AEDT.

“The Fed will not raise rates this week, as there is no need to exercise that option just yet and the markets are not demanding further tightening,” said Erik Weisman, Chief Economist and Portfolio Manager at MFS Investment Management.

“But, until the labour market has cooled considerably, and inflationary pressures display sufficiently persistent containment, the Fed will keep the option of future rate hikes firmly on the table.”

On the ASX, a tsunami of companies (both large and small caps) lodged their September quarter reports today, being the last day of the month.

Gains in the Staples and Real Estate sectors were offset by losses in Mining and Energy sectors. Most energy stocks fell after a 3% slump in crude prices overnight.

Best large cap today was food company Inghams Group (ASX:ING), which rose 7% (see more details below).

Lithium stocks like Pilbara (ASX:PLS) and Mineral Resources (ASX:MIN) were the worst performers.

Treasury Wine Estates (ASX:TWE) is in a trading halt, pending an announcement on a potential acquisition of high-end Californian wine group Daou Vineyards for $US1 billion.

BIG CAP WINNERS

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Code Name Price % Change Volume Market Cap ING Inghams Group 3.65 7.04 3,813,627 $1,267,427,439 360 Life360 Inc. 7.81 5.54 471,925 $1,499,745,242 JLG Johns Lyng Group 6.06 4.04 598,201 $1,608,156,425 HDN Homeco Daily Needs 1.07 3.40 3,187,424 $2,139,285,211 DEG De Grey Mining 1.23 3.38 4,151,141 $2,131,928,017 GNE Genesis Energy Ltd 2.17 3.33 52,618 $2,256,744,590 MAD Mader Group Limited 6.32 3.27 327,911 $1,224,000,000 NEU Neuren Pharmaceut. 10.77 3.26 321,772 $1,320,080,001 QAN Qantas Airways 4.95 3.13 9,415,147 $8,277,382,464 DXS Dexus 6.49 3.02 5,816,896 $6,776,061,050 APM APM Human Services 2.08 2.97 504,865 $1,852,707,531 EVT EVT Limited 10.50 2.64 41,153 $1,660,076,902 VUK Virgin Money Uk PLC 2.80 2.56 1,842,436 $1,845,687,939 ARF Arena REIT. 3.23 2.54 220,818 $1,110,538,491 HLS Healius 1.82 2.39 542,391 $1,014,455,759 SUL Super Ret Rep Ltd 13.06 2.35 806,016 $2,881,546,140 EBO Ebos Group Ltd 32.10 2.16 19,189 $6,026,597,777

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Poultry company Inghams (ASX:ING) jumped 7% after releasing its H1 trading update where it expects $247 million in statutory EBITDA. However, Inghams said the second-half result is expected to be lower than the first half, due to normal seasonality, and continued inflationary headwinds across labour, feed and other costs including fuel, electricity and CO2.

Liontown Resources (ASX:LTR) said its Kathleen Valley project was more than 50% complete, with a clear line of sight to first production mid-2024. During the September quarter, Liontown awarded the final major mining and construction contracts for Kathleen Valley, bringing capital costs committed to approximately 90% and de-risking the pathway to first production.

BIG CAP LOSERS

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Code Name Price % Change Volume Market Cap CEN Contact Energy Ltd 7.29 -5.81 46 $1,970,187,851 SQ2 Block 60.80 -3.99 83,886 $2,082,521,238 PLS Pilbara Min Ltd 3.67 -3.93 21,983,367 $11,496,147,361 DTL Data#3 Limited 6.86 -3.92 514,752 $1,104,587,017 AKE Allkem Limited 9.57 -3.63 3,175,148 $6,348,460,439 MIN Mineral Resources. 58.02 -3.62 664,014 $11,750,222,966 HGH Heartland Group 1.40 -3.46 472 $1,033,558,315 NST Northern Star 11.70 -3.23 2,400,646 $13,894,083,292 YAL Yancoal Aust Ltd 4.83 -2.62 1,856,402 $6,549,379,608 SMR Stanmore Resources 3.78 -2.33 933,575 $3,488,385,624 IGO IGO Limited 9.48 -2.22 3,413,678 $7,337,925,108 RMS Ramelius Resources 1.64 -2.09 5,833,611 $1,902,107,125 CDA Codan Limited 7.77 -1.96 136,860 $1,436,023,615

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Origin Energy (ASX:ORG) fell -0.5% after AustralianSuper, which owns around 14% of Origin shares, rejected Brookfield and EIG’s bid for the company.

Brickworks (ASX:BKW) fell as it trades ex-dividend today.

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