ASX 200 finishes up 38 points at 7213 (0.5%) as iron ore stocks rally hard on Asian gains. BHP up 2.7% and FMG up 2.8% leading the charge as Dalian futures hit a 4-month high on hopes of a Chinese property rescue. Lithium stocks still struggling a little post GS research. Gold miners were better with NCM up 0.8% and NST gaining 2.0%. EVN up 2.4%. CHN continue to push on up another 3.8%. SYR and 29M also in demand. Energy stocks flat, coal stocks mixed, WHC up 1.3%. In industrials, REITs slipped a little, gaming stocks better with ALL up 0.2% and healthcare modestly higher. Tech stocks better as WTC rallied 1.2% and XRO up 0.8% as book squaring pre-PPI was the way to go. Banks were mixed with CBA easing 0.4% and the Big Bank Basket flat. MQG under pressure down 1.8%, PNI slammed as performance fee evaporated, down 3.8%. In corporate news, Potentia were back for NTO, up 3.4% and above the 200c bid price. BTH returned after its ‘successful’ capital raise falling 21.5%. BSL up 0.4% after accused of cartel behaviour. SGR up 0.6% after being fined $100m but QLD casino’s allowed to stay open. BPT threw in the towel in the WGO takeover battle and rose slightly. STX hurt on the news down 8.0%. Nothing on the economic front. 10-year yields lower at 3.29%. Asian markets better HK up 1.7%, China up 0.3% with Japan up 1.2%.

HEADLINES

  • Winners: ARU, MGX, CUV, CIA, SFR, REG, TUA
  • Losers: STX, RNU, NVX, 360, CMM, PNI
  • Positive sectors: Iron ore. Gold. Tech. Industrials.
  • Negative sectors: Lithium. Utilities.
  • High 7218 Low 7184
  • Iron ore hits 4-month high.
  • Big Bank Basket: Closed down at $182.25 unchanged.
  • All-Tech index: Up 0.5%
  • Gold eases to $2643
  • Bitcoin: Better at US$17,204
  • Aussie Dollar: Up to 67.95c
  • 10-Year Yield: Slips to 3.29%
  • Asian markets: HK up 1.7%, China up 0.3% with Japan up 1.2%.
  • US Futures: Dow up 44 Nasdaq up 33

MAJOR MOVERS

  • ARU +10.26% bouncing back after cap raise.
  • CIA +5.15% MGX +6.93% iron ore bounce.
  • SFR +4.81% considering EOI for DeGrussa.
  • CHN +3.81% looking the goods.
  • KAR +3.88% technical bounce.
  • DUB +14.89% recording good gains.
  • LIN +12.90% completes placement at 21c.
  • BTH -21.53% poison pill placement works a treat. Not.
  • WR1 -13.00% profit taking. MD appointed to Power Metals Board.
  • STX -8.00% 19.9% stake in WGO. BOT drops out.
  • CMM -4.33% change in director’s interest.
  • PNI -3.77% no performance no fee. Simples.
  • VNT -3.09% resignation of company secretary
  • DOW -3.14% down! Down! Downer are down
  • Speculative Stocks of the Day: Patriot Lithium (PAT) +80.00% new IPO first day. Non-executive Chairman Phil Thick former head of Tianqi Lithium Australia. Black Hills, South Dakota in US. IPO 50m shares at 20c.  Codrus Metals (CDR) +50% – Not too bad on the volume front. Confirms high grades at Niobium -Rich Karloning REE project in WA.

IN THE NEWS

  • Rio Tinto (RIO) – The AFR has reported that chief executive Jakob Stausholm has contacted Fortescue Metals (FMG) Group chairman Andrew Forrest in order to see if the two companies can unite to work on green hydrogen as a possible replacement for fossil fuels. Andrew Forrest is currently one of the biggest investors in renewables in Australia and has recently acquired CWP renewables for $4bn of his own funds.
  • Washinton H. Soul Pattinson and Company (SOL) has provided a Q1 update, with a net asset value per share of $27.84, an increase of 1% from the previous corresponding period.
  • Beach Energy (BPT) has announced that it will not exercise its matching rights for Warrego Energy (WGO) after saying the Hancock offer was a superior offer. WGO board has also unanimously recommended that shareholders accept the Hancock takeover offer. WGO has dropped over 3% today as investors were urged to take the Hancock offer, and BPT retracts their offer.
  • Pinnacle Investment Management Group (PNI) has advised that it expects its net share of performance fees after tax payable to be potentially less than $1m vs $6.4m for the corresponding period ending 31 December 2021. “From a longer-term perspective, over the 5 years to 31 October 2022, 85% of Pinnacle Affiliate strategies which have a track record exceeding 5 years have outperformed their benchmarks”.
  • Healius (HLS) announced it has entered into a binding agreement to sell Montserrat Day hospitals to Nexus Hospitals for $138.6m. Completion of transaction expected to occur H1 of 2023. Healius will continue to provide pathology services across its Monserrat facilities, with the potential to expand the provision of diagnostic services with Nexus Hospitals.

ECONOMIC NEWS

  • The most-traded January iron ore on China’s Dalian Commodity Exchange rose 4.6% to 814.0 yuan ($US116.98) a tonne, its highest level since June 16 and rising about 6.7% this week.
  • The most-active rebar contract on the Shanghai Futures Exchange rose 2.9%, hot-rolled coil climbed 2.3%, wire rod advanced 2.2%, and stainless steel edged 1.4% higher.
  • Westpac predicts a modest growth outlook in 2023 and 2024.
  • Chief economist Bill Evans forecasts a slowdown in the Australian economy to 1.0%in 2023 and 2% in 2024.
  • The bank expects annual growth of 2.6% this year.

ASIAN MARKETS

  • China’s factory-gate prices contracted again in November while consumer inflation eased as disruptions from Covid outbreaks and restrictions hurt manufacturing activity and reduced demand. The producer price index fell 1.3% in November from a year earlier after declining by the same magnitude in October.
  • JPMorgan Chase said economic growth of around 5% is “achievable” for China next year depending on how the reopening goes.
  • Iron ore rose to its highest in four months on news that Chinese authorities may further soften their stance on property policies at a key meeting next week.
  • Foxconn founder Terry Gou reportedly said China’s zero-Covid policy threatened its position in global supply chains. Apparently, he was one of the voices the authorities listened to in deciding to roll back the restrictions.

US AND EUROPEAN HEADLINES

  • The FTC is seeking to block Microsoft’s US$69bn acquisition of COD owner Activision Blizzard saying it would harm competition. No one seems to be that concerned.
  • Brazil’s Lula expected to appoint leftwing loyalist as Brazil’s finance minister.

And finally….

Clarence

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