• ASX rebounded on Wednesday on conviction rates will not rise any higher
  • Iron ore, lithium stocks rise
  • Endeavour Group, HCM Capital and Magellan were best performers

 

The ASX 200 bounced back hard from yesterday’s losses as it closed Wednesday 1.7% higher.

All 11 sectors rose, led by Real Estate and Staples with Info Tech not far behind.

Local traders are parsing through RBA governor’s rather bullish tone as she spoke to a high-powered gathering of central bankers in Hong Kong. Bullock said Australian companies are resilient in the face of challenging macro backdrop.

“Despite that noise, households and businesses in Australia are actually in a pretty good position, “ she said following the RBA’s decision to pause rate hikes yesterday. “Their balance sheets are pretty good.”

Equities have also been supported by lower bond yields. Overnight, the benchmark US 10-year yield plunged by 10bp (bond prices rise), while Aussie yields remained flattish today.

“[Aussie] 10-year yields are likely to muddle around the current cash rate for some time,” said Andrew Canobi, Director Franklin Templeton Australia Fixed Income.

Iron ore miners BHP (ASX:BHP) and Rio Tinto (ASX:RIO) rose today, tracking higher iron ore prices in Singapore.

Lithium stocks like Pilbara Minerals (ASX:PLS) and IGO (ASX:IGO) also jumped 5-6%, also tracking higher lithium prices.

Across the region, Asian shares mainly advanced.

According to Bloomberg, India’s stock market value has reached more the US$4 trillion mark, after adding US$1 trillion in market cap in less than three years. This is a key milestone for the world’s fifth-biggest equity market, as it rapidly narrows the gap with the slumping Hong Kong market.

 

BIG CAP WINNERS

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Best large cap today was diversified real estate manager HCM Capital (ASX:HMC), which rose 14% on no specific news.

Hotels and alcohol retailer Endeavour Group (ASX:EDV) rose after saying that it expects to grow its Hotels EBIT by more than $150 million over the next five years, through operational optimisation and property investment.

“We are strengthening our customer understanding and driving further innovation in our Hotels business, by progressively launching our pub+ app,” said Endeavour CEO, Steve Donohue.

“The pub+ app will provide customer connections that will help us to deliver a superior pub experience, with personalised offers across our network of more than 350 hotels.”

Finance house Perpetual (ASX:PPT) rose 5% after saying that since the AGM, it has further progressed the evaluation of strategic options. The company said it will separate its Corporate Trust and Wealth Management businesses, and create a more focused Asset Management business.

Woodside Energy (ASX:WDS) was up 1% after signing a sales and purchase agreement with Mexico Pacific to purchase 1.3 million tonnes per annum (Mtpa), equivalent to approximately 18 cargoes per year, of liquefied natural gas (LNG) for 20 years.

Rio Tinto (ASX:RIO) edged up 1% after providing an update at its Investor Seminar today on the Simandou iron ore project in Guinea. Rio estimates that its initial share of capital expenditure to develop the Simfer mine and the codeveloped rail and port infrastructure project is approximately $6.2 billion.

Magellan Financial Group (ASX:MFG) rose 2.5% after reporting an almost $1 billion increase in funds under management (FUM) in November to $35.2 billion versus a month ago.

 

BIG CAP LOSERS

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Gold miner Evolution Mining (ASX:EVN) was the worst performing large cap today, down almost 15% after announcing a $525 million cap raise. The company plans to issue 138.2 million new shares to institutional investors at $3.80 a share.