Closing Bell: Resource stocks win ASX tug of war as market ends flat
Gold lifts 1.4pc to five-week high
Banks mostly lower as profit taking continues
Resource gains outweigh bank sell down
It was a veritable tug of war on the ASX today as surging resources stocks went to war with floundering banking shares and managed to snatch victory right at the last second.
The ASX lifted just 9 points or 0.1%, struggling into positive territory in the last ten minutes of trade.
The sell down in major banking stocks continued throughout the day, undercutting the resource sector's momentum.
Commonwealth Bank (ASX:CBA) was hit hard, down another 3%. NAB (ASX:NAB) also took a sizeable whack, shedding 2.69% while the rest of the top 7 fell between 1.27% and 0.34%.
The exceptions were Macquarie (ASX:MQG) which added 0.23%, and QBE (ASX:QBE), which tipped up 0.22%.
Iron ore and gold were the champions of the materials sector and the greater market today, clawing higher on rising commodity prices despite a day of choppy trading that trended mostly negative.
Healthcare also put in an excellent showing, with several mid and small cap stocks climbing. Botanix Pharmaceuticals (ASX:BOT) jumped 9.6% and Clarity Pharmaceuticals (ASX:CU6) 7%.
Still, it was iron and gold miners that topped the gainers lists today. More on the iron gang in a second.
Pantoro Gold (ASX:PNR) jumped 12%, West African Resources (ASX:WAF) 8% and Ramelius Resources (ASX:RMS) 7.9%.
Is the iron ore rally sustainable?
Iron ore prices shot up to four-month highs overnight, hurdling the US$100 per tonne mark to sit at US$104.1 presently.
News of a new megaproject out of China was the core driver of the push higher – Beijing intends to invest 1.2 trillion yuan ($260 billion) in a hydropower dam on the Tibetan Plateau.
Iron ore miners are chomping at the bit to get a piece of the action. BHP (ASX:BHP) jumped 2.3%, Fortescue (ASX:FMG) 3%, and Rio Tinto (ASX:RIO) 3.3%.
Unfortunately, analysts are warning iron ore's latest bullish run doesn't reflect market fundamentals.
Market moguls at Citigroup and UBS reckon the iron market is trending toward oversupply.
Rio Tinto's Simandour project is set to ramp up production to 48 million tonnes of iron ore per year by 2028, accounting for about 5% of global supply all on its lonesome.
UBS reckons the iron ore market will be in surplus by 100 million tonnes by 2027 at current rates.
"The sustainability of current prices depends largely on whether China's promised policy support materialises in the form of actual construction activity and steel demand," Westpac (ASX:WBC) acting chief sustainability officer and commodities strategist Michael Chen said.
"Without concrete demand increases, the fundamental case for $100+ iron ore becomes difficult to justify."
ASX SMALL CAP LEADERS
Today's best performing small cap stocks:
Code Name Last % Change Volume Market Cap
IS3 I Synergy Group Ltd 0.012 300% 7074192 $5,118,900
PAB Patrys Limited 0.002 100% 1540555 $2,365,810
VR8 Vanadium Resources 0.041 78% 42838618 $12,978,713
MPA Mad Paws 0.13 73% 36137123 $30,468,169
CUL Cullen Resources 0.006 50% 247093 $2,773,607
AS2 Askarimetalslimited 0.016 45% 19518384 $4,445,878
LMG Latrobe Magnesium 0.016 45% 17547486 $28,892,490
ALR Altairminerals 0.004 33% 15049123 $12,890,233
FAU First Au Ltd 0.004 33% 1206788 $6,228,874
SHP South Harz Potash 0.004 33% 56178 $3,849,186
KGD Kula Gold Limited 0.009 29% 16412263 $6,448,776
BIT Biotron Limited 0.0025 25% 619581 $2,654,492
FHS Freehill Mining Ltd. 0.005 25% 50000 $13,655,414
MMR Mec Resources 0.005 25% 155000 $7,399,063
TMK TMK Energy Limited 0.0025 25% 11279067 $20,444,766
GLL Galilee Energy Ltd 0.011 22% 2306250 $6,364,736
AAU Antilles Gold Ltd 0.006 20% 2098629 $11,895,340
AOK Australian Oil. 0.003 20% 473088 $2,594,457
AON Apollo Minerals Ltd 0.006 20% 12688298 $4,642,284
OLI Oliver'S Real Food 0.006 20% 83366 $2,703,660
PRM Prominence Energy 0.003 20% 200000 $1,216,176
SLZ Sultan Resources Ltd 0.006 20% 1443673 $1,157,350
TFL Tasfoods Ltd 0.006 20% 334313 $2,185,478
NTI Neurotech Intl 0.025 19% 3221353 $22,042,060
WMG Western Mines 0.285 19% 297333 $23,229,203
In the news…
The ASX has hit the emergency breaks on iSynergy Group (ASX:IS3), slapping the marketing platform with a 'Please explain' and a trading halt after the company's shares surged 300% intraday.
Management says it's working on a response to the ASX's query and expects to be out of suspension by Thursday, but no other details were forthcoming.
Vanadium Resources (ASX:VR8) has locked in a two-year DSO offtake deal with China Precious Asia Limited for vanadium-rich magnetite, agreeing to supply 100,000 metric tonnes of direct shipping ore per month.
The deal hinges on two things; the official start of mining operations at the Steelpoortdrift vanadium project and the two parties finalising pricing terms by the end of August.
Mad Paws (ASX:MPA) has entered a scheme implementation deed, agreeing to be acquired by Rover Group, Inc at $0.14 per share. The deal values Mad Paws at about $62m.
Separately, MPA is offloading its online e-commerce division under the Pet Chemist brand for about $13m in cash consideration.
Digital content provider Streamplay Studio (ASX:SP8) is climbing on some solid quarterly results that saw the gaming company achieve a cash flow positive quarter, operating on a surplus of $390k.
SP8 cashed customer receipts totalling $1.44m, maintaining cash reserves of $7.7m despite investments in its game development studio Noodlecake Studios, the studio behind mobile games Super Flappy Golf and Sacre Bleu.
ASX SMALL CAP LAGGARDS
Today's worst performing small cap stocks:
Code Name Last % Change Volume Market Cap
AUH Austchina Holdings 0.001 -50% 37338 $6,050,767
MIOR Macarthur Minerals 0.002 -33% 16728 $299,498
PFM Platformo Ltd 0.055 -29% 33012 $7,307,939
GTR Gti Energy Ltd 0.003 -25% 9682499 $14,835,762
PKO Peako Limited 0.002 -20% 4801244 $3,719,355
PRX Prodigy Gold NL 0.002 -20% 28500 $15,875,278
RLG Roolife Group Ltd 0.004 -20% 4598095 $7,963,906
BEL Bentley Capital Ltd 0.009 -18% 5658 $837,407
SFM Santa Fe Minerals 0.285 -17% 115914 $25,122,482
ALY Alchemy Resource Ltd 0.005 -17% 307081 $7,068,458
AMS Atomos 0.005 -17% 179652 $7,290,111
SIS Simble Solutions 0.005 -17% 525549 $6,493,982
SKK Stakk Limited 0.005 -17% 548791 $12,450,478
UNT Unith Ltd 0.005 -17% 8994656 $8,872,713
TOU Tlou Energy Ltd 0.021 -16% 25000 $32,464,608
LOC Locatetechnologies 0.11 -15% 1468361 $30,572,664
ANR Anatara Ls Ltd 0.006 -14% 14000 $1,493,686
BLU Blue Energy Limited 0.006 -14% 1053411 $12,956,815
BYH Bryah Resources Ltd 0.006 -14% 7203753 $6,789,675
CMO Cosmometalslimited 0.019 -14% 209990 $7,086,984
NWM Norwest Minerals 0.013 -13% 25694 $14,525,378
FXG Felix Gold Limited 0.17 -13% 1812100 $85,582,148
ATS Australis Oil & Gas 0.007 -13% 110000 $10,544,500
NAE New Age Exploration 0.0035 -13% 617716 $10,823,646
WEC White Energy Company 0.035 -13% 94 $12,464,796
IN CASE YOU MISSED IT
Legacy Minerals (ASX:LGM) has kicked off a 10,000m diamond drilling campaign at its Fontenoy platinum group elements and copper-gold project in NSW.
Trading Halts
American Rare Earths (ASX:ARR) – cap raise
I Synergy Group (ASX:IS3) – ASX price query
Octava Minerals (ASX:OCT) – cap raise
Sun Silver (ASX:SS1) – cap raise
West Coast Silver (ASX:WCE) – cap raise
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