The ASX has settled down 0.50% or 41.7 points after a subdued day of trading, responding to weakness in Wall Street that saw markets slip 0.3% on average and digesting comments from the RBA that underlying inflation was still too high in Australia.
The Reserve Bank is currently indicating a rate cut is on the cards for May next year, but if disinflation remains on track the central bank could make a cut as easy as February.
There was weakness across the ASX200 sectors with Real Estate being the only stand out, gaining 0.78%.
Real Estate firm Goodman Group (ASX:GMG) (Goodman Group (ASX:GMG)) gained 1.41% while Stockland Corporation rose 2.41%.
The hardest hit sector was Info Tech (-1.30%) with Utilities (-1.03%), Energy (-0.99%), and Industrials (-1.05%) close behind.
WiseTech Global fell 2.82% while Xero Ltd slipped 1.63%. Origin Energy fell 2.16% but Mercury NZ Ltd lifted 1.06% and APA Group (ASX:APA) 1.09%.
The bottom performing stocks were IPH Limited, down 4.44%, and South32 (OTC:SOUHY) Ltd (LSE:S32, ASX:S32, OTC:SHTLF, JSE:S32) (South32 Ltd (LSE:S32, ASX:S32, OTC:SHTLF, JSE:S32), South32 Ltd (LSE:S32, ASX:S32, OTC:SHTLF, JSE:S32), South32 Ltd (LSE:S32, ASX:S32, OTC:SHTLF, JSE:S32), South32 Ltd (LSE:S32, ASX:S32, OTC:SHTLF, JSE:S32)), down 4.76%.
The ASX200 has fallen 1.32% in the last five days, currently sitting 1.92% below its 52-week high.
Power stocks of 2025 begin to emerge
Stock trading platform moomoo Australia market strategist Jessica Amir joins us to discuss stocks of interest for 2025.
“US stocks pulled back overnight as momentum faded as traders braced for US inflation data that could determine if the US Federal Reserve cuts or holds rates next week,” Amir writes.
“The Nasdaq 100 and the S&P 500 fell for the second day, with both key indices down 1% from record highs. Investors are locking in profits from this year’s best-performing stocks: Nvidia is down 9.4% from its high and Vistra has dropped 16% from its peak.
“Despite this, Nvidia and Vistra remain the best performers this year, up 267% and 172% respectively. It seems investment managers are taking their profits and reallocating funds to some of this year’s biggest losers, believing they could see a significant turnaround in 2025.
“While the narrative hasn’t changed for AI chips, in Nvidia’s case, or uranium, in Vistra’s case, the market is signalling it’s time to consider portfolio positioning for 2025 and look at stocks that could make a comeback and lead share market growth.
“Also in the US market, Walgreens shares rose 18% overnight on a potential takeover, while Estee Lauder (NYSE:EL) shares climbed 25% from their lows.
“The beauty and cosmetics giant has high exposure to Chinese consumers and could stage a comeback as China vows to boost domestic spending and cut rates.
“Walgreens and Estee Lauder are down 60% and 43% this year respectively, making them two of this year’s biggest underperformers.
“In Australia, the narrative around interest rate cuts was flipped on its head yesterday, with the Reserve Bank opening the door to a February rate cut.
“That might mean it’s risk-on for interest-rate-sensitive stocks and sectors such as real estate and technology. But perhaps not just yet. You could expect momentum to fade in some of this year’s best performers, such as Zip (ASX:ZIP) and Life360.
“They’re both up 262% and 202% this year respectively, but we’ve seen Zip fall 15% from its peak, and Life360 has dropped 14%.
“Gold stocks may provide a bright spot after the metal's price rose 1.3%, supported by China pledging more stimulus.
“China is the largest consumer of gold and is approaching the Lunar New Year celebrations, a period of increased gold demand for gift-giving.
“A soft US inflation print tonight and a potential US Federal Reserve rate cut next week could further support gold prices.”
Small cap increases
Kali Metals Ltd (ASX:KM1) increased 20.84% today to $0.145 on identifying a 5-kilometre-long gold anomaly at the Marble Bar Project in Western Australia, Dynamic Metals Ltd (ASX:DYM) lifted 17.5% to $0.235 after defining RC drilling targets at the Cognac West prospect within the Widgiemooltha Project in Western Australia and Suvo Strategic Minerals Ltd (ASX:SUV) reached $0.045, a 15.4% increase on the previous close.
Other small cap movers included Tamboran Resources Corp, which was up to 12.5% higher at $0.2, Firebird Metals Ltd (ASX:FRB, OTC:FRBMF) lifted 10% to $0.11, Pantoro Ltd (ASX:PNR, OTC:PNTOF) peaked at $0.105, an increase of 9.38%, Ora Banda Mining Ltd (ASX:OBM) was 8.91% higher to $0.64, Polymetals Resources Ltd (ASX:POL) hit a new record of $1.01, up 8.61%, Arovella Therapeutics Ltd (ASX:ALA) climbed 8.34% to $0.195 and Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF) moved 6.82% higher to $1.175.
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Dynamic Metals reveals Cognac West gold anomalies
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