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The morning catch up: ASX set to lift for fifth session; US markets rebound on cautious Fed Reserve minutes

Published 12/10/2023, 09:35 am
Updated 12/10/2023, 10:00 am
© Reuters.  The morning catch up: ASX set to lift for fifth session; US markets rebound on cautious Fed Reserve minutes
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ASX futures are pointing to a small lift of 0.08% or 6 points in early trading, perhaps indicating a fifth session of gains for the local bourse.

Yesterday, the ASX200 gained 0.68% on the back of mining and lithium stocks.

Information Tech stocks gained 1.7%, up 5.6% over the last five days, while Consumer Discretionary lifted 1.2% and Industrials 1.1%.

Anticipated Chinese stimulus measures lifted mining stocks nearly 1%, with lithium sector leaders Pilbara Minerals (+2.02%) and Mineral Resources (+1.43%) reaping the benefits.

Energy stocks have lost some upward momentum, gaining only 0.2% yesterday – Woodside added 0.62% to its stock price and Santos gained 0.65% despite a downturn in oil prices.

Gold stocks suffered, led by a 1.23% decline in Northern Star Resources (ASX:NST), despite mounting tensions in the Middle East.

The imminent resignation of Qantas chair Richard Goyder lifted the stock 2.2%, driven out by disgruntled investors displeased with the board’s handling of legal and regulatory challenges.

Bank of Queensland shares plummeted 7.44% after the small-cap lender unveiled a disappointing annual profit and a bleak future outlook.

US and European markets

Over in the US, share markets were falling until Federal Reserve minutes revealed a cautious approach to further interest rate adjustments amid volatile economic conditions.

The Dow Jones index rose 0.2%, adding 66 points, while the S&P 500 gained 0.4%. The Nasdaq index saw a more pronounced increase, adding 97 points or 0.7%.

In individual stocks, pharmaceutical firm Eli Lilly (NYSE:LLY) gained 4.5% on the heels of Novo Nordisk (CSE:NOVOb) (NYSE:NVO)'s positive drug trial results.

DaVita (NYSE:DVA) and Baxter International (NYSE:NYSE:BAX), both involved in dialysis, experienced sharp declines, losing 16.9% and 12.3% respectively.

Exxon Mobil (NYSE:XOM) shares fell 3.6% upon announcing a US$59.5 billion acquisition deal with Pioneer Natural Resources (NYSE:NYSE:PXD), which rose 1.4%.

European markets remained relatively unchanged. The FTSEurofirst 300 index edged up 0.2%, while the UK FTSE 100 index dipped slightly by 0.1%.

Real estate stocks experienced a 1.2% uptick, in contrast to a 2.1% decline in retail stocks.

Luxury conglomerate LVMH saw its shares plummet to their annual low, dropping 6.5% following disappointing financial results.

On the pharmaceutical front, Novo Nordisk (NYSE:NVO) shares surged 4.9% after a favourable update on its diabetes medication, Ozempic.

Currencies and commodities

In currency markets, the US dollar outperformed its peers in both European and US trading sessions.

The Euro weakened from US$1.0632 to US$1.0583, settling near US$1.0615 at the US close.

The Australian dollar slid from US64.32 cents to US63.88 cents, rounding off near US64.10 cents at the US close.

Similarly, the Japanese yen depreciated from 148.59 yen per US dollar to JPY149.34, stabilising around JPY149.15 by the US close.

Global oil prices experienced a 2% decline, allaying fears of Middle East supply disruptions after Saudi Arabia, a leading OPEC producer, flagged its intentions to stabilise the market.

Brent crude retreated by US$1.83 or 2.1% to close at US$85.82 a barrel. US Nymex crude dropped US$2.48 or 2.9% to end at US$83.49 a barrel.

Base metals also fell, with copper and aluminium futures declining 0.5% and 0.1% respectively.

Gold futures, however, saw a modest increase of US$12 or 0.6%, closing at US$1,887.30 an ounce. Spot gold was near US$1,873 an ounce at the US close.

Iron ore futures ascended US91 cents or 0.8% to US$118.31 a tonne, buoyed by renewed expectations that China might introduce more significant stimulus measures to bolster its economy.

On the small cap front

The Small Ords followed the ASX up yesterday, gaining 20.4 points or 0.76% to 2,705.5.

  • Piedmont Lithium (ASX:NASDAQ:PLL, OTC:PLLTL) Inc flagged its intention to acquire a 19.9% interest in newly formed Vinland Lithium, potentially earning up to 62.5% through staged investments.
  • Antipa Minerals Ltd (ASX:AZY) has struck several promising gold intersections at the GEO-01 discovery at the Minyari Dome Gold-Copper Project, grading up to 50 metres at 2.3 g/t gold from 72 metres with a peak grade of 1-metre at 19.95 g/t gold from 137 metres.
  • First Graphene Ltd (ASX:FGR, OTCQB:FGPHF) entered into a Development and Commercialisation agreement with leading UK cement manufacturer Breedon Group, to enhance Breedon’s cement product with improved compressive strength and a reduced carbon footprint.
  • Australian Strategic Materials has fielded what it describes as “excellent” results from heavy rare earth oxide separation tests at its Dubbo Project pilot plant, producing high purity terbium and dysprosium.
  • Sunstone Metals Ltd (ASX:STM) expanded the known gold-silver mineralisation at the Bramaderos Gold-Copper Project to an 800-metre strike length, simultaneously identifying a new zone of mineralisation at the Limon prospect.
  • Read more on Proactive Investors AU

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