ASX Large Caps: Oil, lithium stocks drag ASX lower; Hindenburg promises another bombshell report

• The ASX 200 is down around 0.7% on Thursday
• Oil and lithium stocks sold down
• Hindenburg Research promised a new report soon

The ASX 200 index fell 0.7% across the board on Thursday, with Staples and Comm Services the only sectors in the green.

Local shares tracked Wall Street lower after the US Fed lifted the Funds rate overnight by another 25bp to 4.75%-5%, despite the banking turmoil.

The collapse of SVB, Credit Suisse and Silvergate are signals that rates are starting to bite, and language conveyed by Jerome Powell during his post meeting conference suggested that a pause in rate hikes could be imminent.

“Signs that the US is nearing the end of its rate cycle could bode well for the longer term prospects of US technology stocks, which have been hit hard by rate increases over the past year,” said Megan Stals, markets analyst at brokerage platform, Stake.

“But the Fed does not expect to cut rates by the end of the year, and the short term outlook is still uncertain,” she added.

Oil stocks weighed on the ASX bourse today after crude prices fell 1% in Asian hours.

Lithium stocks were also sold down, with the likes of Pilbara Minerals (ASX:PLS) and Allkem (ASX:AKE) leading the rout, down by 4% each.

Hindenburg promises another bombshell

A report by Russell Investments said that Australian growth should continue to slow through 2023, but recession risk is lower than in the northern hemisphere.

“Many mortgage interest rates will reset from April, and the increase in mortgage payments will weigh on household consumption,” the report said.

“Importantly, however, many households have substantial home equity which reduces the potential for significant mortgage defaults.”

The report went on to say the RBA could near the end of its tightening cycle, which means that Australian government bonds could offer attractive valuations.

Elsewhere, short seller Hindenburg Research has created a buzz again after tweeting that it will soon release a new report on another target, without offering details.

New report soon—another big one.

— Hindenburg Research (@HindenburgRes) March 22, 2023

We are waiting 😛 pic.twitter.com/7trwgO0noc

— Ashu Deori (@ashu_deori) March 23, 2023

The New York based firm had earlier caused a selloff of more than US$150 billion from Indian Adani Group shares after publishing a damning report on Jan 24.

Meanwhile, the UK’s inflation accelerated unexpectedly to 10.4% in February, complicating the Bank of England’s rate decision later tonight.

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Brickworks (ASX:BKW) rose 3% after reporting a record half-year underlying NPAT of $410 million (statutory NPAT $354 million).

BKW paid interim dividend 23 cents per share, extending its 47-year record of maintaining or increasing dividends.

BIG CAP LOSERS

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Sigma Healthcare (ASX:SIG), Australia’s biggest pharmaceutical wholesaler, fell 1.6% as it swung to a narrow full-year profit of $1.8m, up from ($7.2m) loss a year earlier.

Polynovo (ASX:PNV) plunged 12% on no specific news.