ASX fell hard from the open closing down 94 points at 6664 (-1.4%). All sectors eased, but resources and iron ore especially bore the brunt. BHP down 2.3%, RIO off 2.6% and FMG falling 1.2%, not helped by Xi’s speech over the weekend on CV19 Zero. Gold miners fell hard too despite AUD bullion prices rising yet again as the AUD hovered around 62c. NCM down 1.8% and NST off 4.0%. Base metal miners also on the nose, IGO falling 1.6% after the MD died on the weekend unexpectedly. Lithium stocks in demand with PLS pushing 2.1% higher and LTR and CXO having a good day out, both in the top performers on the day. Record high prices in China. Oil and gas stocks fell after crude falls on Friday although Asian oil slightly higher at least. Coal stocks also took a breather. Banks were weak but outperformed, the Big Bank Basket falling to $177.71 (-0.6%), CBA down 0.8% and MQG dropping 4.2%. Insurers also stumbled lower as QBE fell 4.1% and IAG up 1.6% despite announcing a buyback post the court win last week. Other financials fell, ASX down 1.4% and MFG falling yet another 2.5%. Healthcare slid as CSL updated the market on Vifor, falling 1.3% with RHC down 1.7%. Industrials sagged as ABC collapsed 22.0% on a bad update, CGC fell 13.4% on citrus issues and TLS fell 1.3%. Tech drifted only slightly lower, which was a result given Nasdaq falls, CPU off 1.2% and the All-Tech Index down 0.3%. In corporate news, TYR looks like WBC has joined the game, up 8.7%, CXO rallied 5.2% as the MD is moving on sooner rather than later, NWS up 3.6% on Fox merger talk and SRX fell 13.7% on a production and cost update. Nothing on the economic front. Asian markets slightly lower. 10-year yields at 4.02% again. Dow Futures are up 139 points.
- Winners: TYR, PPC, TUA, CXO, LTR, PPH, SLX
- Losers: ABC, CGC, CTT, SBM, PNI, SQ2, CSR, BLD, LLL
- Positive sectors: Selected lithium stocks, EDV.
- Negative sectors: Iron ore. Building materials.
- High 6734 Low 6645
- Big Bank Basket: Closed down at $177.71 (Down 0.6%)
- Oil slightly higher in Asian trade.
- All-Tech index: Down 0.3%.
- Gold: Higher at $2648
- Bitcoin: Falls to US$19176
- Aussie Dollar: Bounces off 62c to 62.25c
- 10-Year Yield: Steady at 4.02%
- Asian markets: Japan down 1.3%, HK down 1.1% and China down 0.4%.
- US Futures: Dow up 172 Nasdaq up 80.
- European markets set to open modestly lower across the board. UK the focus.
- LTR +4.89% strong lithium price and takeover speculation.
- CXO +5.19% high conviction stock.
- NWS +3.63% merger with Fox.
- QPM +9.38% becoming a substantial shareholder.
- WBT +11.32% retail briefing.
- TLX +3.33% extension of partnership.
- DRE +5.26% mineralised carbonatites discovered at C3 and C4.
- DCN up 12.00% GMD -0.47% extension of DCN takeover offer.
- ABC -22.01% not as easy as it appears. Inflation and AUD to blame.
- HIO -62.16% feasibility study gets scuttled.
- CGC -13.42% squeezed on citrus issues with quality and yields.
- CTT -8.68% profit taking.
- CSR -6.30% BLD -5.88% ABC influences.
- MPL -3.41% cyberattack.
- MFG -2.45% appoints David George as CIO.
- Speculative Stock of the Day: Nothing on any volume. Monger Gold (MMG) +14.10% but no real volumes, acquiring Brisk Lithium.
IN THE NEWS
- CSL Limited (CSL) – Provides a Vifor update at its investor presentation. The Biotech company retained its FY23 NPATA guidance between US$2.7 and US$2.8bn (including CSL Vifor). The group expects Vifor’s net profit, for 11 months, to be between US$300 and US$330m. The company warned on the negative impact of unfavourable foreign exchange movements, expecting the full-year impact to be around US$200m, assuming that FX rates as at the end of September remain steady for the balance of the financial year.
- Star Entertainment Group (SGR)- To be fined $100m by NSW casino regulator, for its failure to stem criminal activity and money laundering within its casinos. Casino licence suspended.
- Costa Group Holdings (CGC) – Has issued a trading update due to adverse weather conditions. Full-year EBITDA-S for Citrus category is expected to be considerably lower than previously forecast. Full-year EBITDA-S is still expected to be marginally ahead of last year’s result. The group doesn’t expect any additional material impact from recent heavy rainfall, however, further downside risk is possible if extreme weather conditions continue.
- IGO Limited (IGO) – CEO Peter Bradford passes away suddenly; Matt Dusci appointed Acting CEO.
- Westgold Resources – Commences diamond drilling program at Great Fingall Deeps project
- Sheffield Resources (SFX) – Reports first-quarter net cash used in operating activities $637k.
- Telix Pharmaceuticals (TLX) – Receives IND approval from Chinese NMPA for phase III study of TLX591-CDx.
- Metcash (MTS) – Provides trading updates at investor day. Group sales +7.7% YoY in the 23 weeks to October 9.
- Insurance Australia Group (IAG) – Launches $350m on-market buyback, to run between the 1st and 16th of November 2022.
- ADBRI Limited (ABC) – Guides full-year underlying NPAT $75-85m vs consensus of $116.9m. CEO Nick Miller to step down, effective tomorrow.
- Tyro Payments (TYR) – Media reports that WBC are running the numbers.
ECONOMIC NEWS/ BOND MARKETS
Chinese regulators are planning to launch a series of market-supporting measures to arrest a slump in equities.
The iPhone manufacturing hub of Zhengzhou locked down one of its most-populated districts as a CV19 outbreak flared up.
Key takeaways from Xi’s speech:
- “China’s international influence, appeal and power to shape the world has significantly increased.”
- “Chinese modernization offers humanity a new choice for achieving modernization.”
- “We will foster an ethos of work, enterprise, dedication, creativity, and frugality throughout society and cultivate new trends and new customs for our times.”
- “In responding to the sudden attack of Covid-19, we put the people and their lives above all else and tenaciously pursued a dynamic Zero Covid policy.”
- “High-quality development is the top priority of building a socialist modern country in all aspects.”
- “We will focus on national strategic needs, gather strength to carry out indigenous and leading scientific and technological research”.
- “We will work actively and prudently toward the goals of reaching peak carbon emissions and carbon neutrality.”
US AND EUROPEAN HEADLINES
- Truss battles for survival. In chaos we Truss.
- UK again the focus as the Chancellor settles in. Not sure he should unpack.
- Hurricane Ian a wake-up call for insurers as losses forecast to hit US$75bn.
- Container freight rates, which soared to record prices at the height of the pandemic, have been falling rapidly and container shipments on routes between Asia and the U.S. have also plunged, data shows.