The ASX 200 is looking like it will finish the week on a positive, up 23 points or 0.34% to 6,835.3 as of 2:30pm AEST.
Unfortunately, the index is still down 0.95% or 22.5 points for what has been a difficult week, with the market pressured on one side by geopolitical conflict in the Middle East and hotter-than-expected inflation for the September quarter on the other.
More on that in a moment.
The sectors were all over the place today; Info Tech fell the most with a 0.66% drop, outstripped by Consumer Staples’ 1.56% gain.
Industrial and Consumer Discretionary also fell, while Healthcare and Telcos were mostly unmoved.
Materials, Financial, Utilities and Real Estate all gained, but none broke through the 1% mark, with only Materials managing to gain more than 0.5%.
On the commodities side of things, oil continued its slide, with West Texas shedding 2.1% today and smaller losses for zinc, tin, and nickel. The other metals were mostly flat, but palladium and silver both added around 1%.
The best performing stocks on the ASX 200 as of 2:30 pm AEST were Champion Iron Ltd (ASX:CIA), up 7.32%, and Silver Lake Resources (ASX:SLR) Ltd, up 5.64%.
Champion Iron’s stock rose as investors backed the company’s expansion plans, which would see its Bloom Lake mine, in Quebec, reach a nameplate capacity of 15 million tonnes of iron per year.
Silver Lake Resources sold 65,400 ounces of gold in the first quarter of this financial year, maintaining FY24 sales and cost guidance with positive free cash flow of $13.3 million this quarter.
The gold miner is recovering from a sharp drop in its share price earlier this month after the company was penalised for an underground safety breach.
Rate Hike in November “all but a given” says Mutual Limited
A November rate hike to 4.35% is more than likely on the cards, says Mutual Limited chief investment officer Scott Rundell, after inflation ran hot in the September quarter.
“Australia’s inflation rate, as measured by the Consumer Price Index (CPI) surprised to the high side for the September quarter,” Rundell writes.
“Headline CPI rose +1.20% quarter-on-quarter (QoQ) vs +0.8% QoQ in the June quarter, and a touch above consensus estimates of +1.1% QoQ.
“The annual run rate fell to +5.4% year-on-year (YoY) from +6.0% YoY at the end of June, but was higher than expected with consensus at +5.3% YoY.
“The most significant contributors to the rise in CPI was fuel (+7.2%), caused by higher crude oil prices, which rose +27% through the September quarter.
“Housing remains an inflation headwind, with rent up +2.2% over the quarter, adding to the +2.5% growth observed through the prior quarter.
“Utility prices rose +4.2%, reflecting higher wholesale prices being passed through to retail customers.
“Each of these three core drivers, fuel, rent and utilities will likely remain inflationary headwinds given underlying structural imbalances.
“While some components ran hot, others eased back more than the aggregate, or rose at a more moderate rate, including food prices (+0.6%) and childcare (-13.6%), the latter aided by changes to the Child Care Subsidies, which came into effect on July 10th.
“In August the RBA revised their CPI forecasts with CPI not expected to be within the bank’s 2.0% - 3.0% target range until late 2025, pushed out from mid-2025 per in their previous forecasts.
“Given the above lack of tolerance and latest data, a hike to 4.35% at the next meeting, on Melbourne Cup, is all but a given.
“Consequently, 90-day bank bills are +10 basis points (bps) higher at 4.33%.
“Market reaction to the new data has been predictable with yields across the curve higher, with the front-end underperforming the back end.
“Market pricing for a rate hike at the November meeting has jumped from low 20% area prior to the CPI print to 61% afterwards.
“The higher rate outlook weighed on equities initially, with the ASX 200 suffering some temporary sticker shock, down -0.4% on the open, before recovering its composure to be back square on the day (last couple of hours of trading).
“With odds of rate hikes firming, the AUD strengthened against the USD, knocking on the door of 0.64.
“There has been a recent questioning in the narrative about whether now was the time to add duration risk with yields at levels not seen in over ten-years.
“We’ve urged a cautious approach to anyone considering embracing this narrative given our fears that inflation would linger.
“The data has spoken, and the risk is real, so to anyone who will listen, stay frosty, stay on your toes, floating rate notes remain your friends in this environment.
“The increased prospect of higher cash rates will underpin a renewed income tailwind for floating rate note funds, while fixed rate funds, exposed to duration risk, have further pain to endure over the cycle.”
Five at Five
Torque Metals doubles down on New Dawn maiden lithium hunt with second RC rig
Torque Metals Ltd (ASX:TOR) is accelerating its drilling campaign at the New Dawn Lithium Project in Western Australia’s Goldfields region with the mobilisation of a second reverse circulation (RC) rig to assist in the company's maiden hunt for lithium.
Read more
Solis Minerals accelerates hunt for lithium at Estrela with second drill rig mobilised to site
Solis Minerals Ltd (ASX:SLM, TSX-V:SLMN, OTCQB:SLMFF) has mobilised a second large capacity drill rig to the Estrela prospect in the Borborema Province of Brazil, one of two major provinces in Brazil known to be rich in lithium-bearing pegmatites.
Read more
Auric Mining to begin grade control drilling at Munda on November 1
Auric Mining Ltd (ASX:AWJ) will begin grade control drilling at the Munda Gold Project in Western Australia shortly as it takes another step towards open-pit mining at the deposit.
Read more
Strickland Metals ramps up Yandal gold exploration; Marwari diamond drilling to begin over the weekend
Strickland Metals Ltd (ASX:STK) will commence diamond drilling at the 100%-owned Horse Well prospect within its Yandal Gold Project in Western Australia over the weekend to further investigate a large gold target at the Marwari discovery.
Read more
Forrestania Resources JV resumes lithium exploration fieldwork at Hydra Project in James Bay, Canada
Forrestania Resources Ltd (ASX:FRS) and joint venture (JV) partner ALX Resources have remobilised a lithium exploration crew to the Volta area of the Hydra Lithium Project in the lithium-rich James Bay area of Canada, resuming a program of fieldwork that was halted due to forest fires in the region.
Read more
On your six
OECD urges Australia to rebalance tax system amid ageing population
In a recent economic survey report, the Organisation for Economic Co-operation and Development (OECD) has advised Australia to reconsider its current taxation approach.
Read more
One to watch
Element 25 to deliver first North American battery grade manganese sulphate processing facility
Element 25 Limited Managing Director Justin Brown joined Steve Darling from Proactive to share an update on the planned construction of the first North American commercial-scale, battery-grade, high-purity manganese sulphate processing facility.
Watch more