Oil stocks rallied on Monday after a surge in oil prices. Picture Getty
ASX Large Caps: Oil stocks take charge, Austal drops 4pc as former execs charged in the US
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- The ASX was up half a percent on Monday
- Oil related stocks gained after the surge in oil prices
- Ship builder Austal down 5% after former execs charged by the SEC
Local shares were up 0.5% on the first day of a new quarter, led by Energy, Tech and Real Estate.
Oil related socks had a broad-based rally after the 7-8% spike in oil prices on Friday driven by OPEC’s planned 1 million+ barrels cut a day, abandoning previous assurances that supply would be held steady.
Saudi Arabia led the cartel by pledging its own 500,000 barrel-a-day supply reduction, saying the voluntary cut was a necessary pre-emptive step in case of any possible demand reduction.
The White House was quick to respond, calling the move “inadvisable”.
“I imagine quite a few central bankers and politicians will be rolling their eyes or shaking their fists at this latest development, as it brings another bout of undesired inflation when central authorities have yet to tackle with the first batch,” said Matt Simpson, senior market analyst at City Index.
Brent is now trading at US$83.74, and Goldman Sachs has upgraded its Brent forecast by December 2023 to US$95, and US$100 for Dec 2024.
Major oil stocks like Woodside Energy (ASX:WDS) and Santos (ASX:STO) rose by around 2-3%.
Austal’s former execs charged
Ship builder Austal (ASX:ASB), which is 19% owned by Twiggy Forrest, was down almost 5% today after announcing that former execs based in the US were accused and charged of manipulating financial information.
“The United States Department of Justice (DOJ) has indicted three former Austal USA employees for allegedly making or causing to be made false and misleading statements about Austal USA’s performance and financial condition between 2012 and 2016, and the US SEC also announced that it has filed civil charges against the same three individuals,” said the release from Austal.
Along with that news, Austal also announced the appointment of a new CFO, Christian Johnstone.
Aussies are diversifying to overseas stocks
Tomorrow, we will see what could arguably be the most hotly contested rate decision of the RBA’s hiking cycle.
Last week’s weaker-than-expected inflation reading of 6.8% has market participants split over what the RBA will do tomorrow – pause or raise interest rates again.
Inflation is moving in the right direction, which is the key takeaway, and the board will welcome this reading. However, the inflation fight isn’t over.
“I would anticipate another hike in April before the RBA looks to pause its rate hiking cycle in May,” said Josh Gilbert, a market analyst at eToro.
Meanwhile, eToro’s Retail Investor Beat Survey indicates that after more than a year of highly turbulent markets, Australian retail investors have become better diversified and are looking more at overseas stocks.
“Commodities have been the best asset class performer for the past two years; therefore, it’s clear why investors have diversified further into the asset,” said Gilbert.
“On top of that, Australian investors know very well that China will be looking to Australia to restock on commodities after years of limited trade, particularly when it comes to copper and iron ore.”
BIG CAP WINNERS
Swipe or scroll to reveal the full table. Click headings to sort.
| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| KAR | Karoon Energy Ltd | 2.30 | 7.48 | 5,142,975 | $1,204,389,002 |
| HGH | Heartland Group | 1.55 | 6.53 | 803 | $1,032,552,681 |
| CTD | Corp Travel Limited | 18.98 | 5.04 | 738,232 | $2,644,106,230 |
| BPT | Beach Energy Limited | 1.48 | 4.59 | 11,381,479 | $3,228,087,123 |
| HMC | HMC Capital Limited | 3.75 | 4.46 | 518,244 | $1,079,789,951 |
| LYC | Lynas Rare Earths | 6.61 | 4.26 | 3,566,822 | $5,920,390,124 |
| PWH | Pwr Holdings Limited | 10.36 | 3.91 | 94,571 | $1,000,791,990 |
| SVW | Seven Group Holdings | 23.95 | 3.68 | 247,353 | $8,391,319,583 |
| AMP | AMP Limited | 1.09 | 3.57 | 14,731,708 | $3,148,847,336 |
| HVN | Harvey Norman | 3.70 | 3.21 | 3,364,859 | $4,460,703,821 |
| LOV | Lovisa Holdings Ltd | 25.00 | 3.14 | 226,670 | $2,613,844,359 |
| VCX | Vicinity Centres | 2.01 | 3.08 | 6,357,838 | $8,854,175,571 |
| HDN | Homeco Daily Needs | 1.19 | 3.03 | 1,656,681 | $2,393,267,930 |
| RWC | Reliance Worldwide | 3.79 | 2.99 | 981,544 | $2,907,548,735 |
| JLG | Johns Lyng Group | 6.58 | 2.97 | 477,192 | $1,671,703,357 |
| LIC | Lifestyle Communit. | 16.34 | 2.96 | 123,643 | $1,659,131,229 |
| IEL | Idp Education Ltd | 28.11 | 2.93 | 820,501 | $7,601,361,922 |
Star Casino operator, The Star Entertainment Group (ASX:SGR), rose 0.5% after announcing the departure of Scott Wharton, just 8 months after he was appointed as CEO.
Lithium stock Lake Resources (ASX:LKE), which rose 10% after the company said its lithium extraction technology can produce high-grade lithium at its facility in Canada.
BIG CAP LOSERS
Swipe or scroll to reveal the full table. Click headings to sort.
| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| ARU | Arafura Rare Earths | 0.50 | -2.94 | 8,333,864 | $1,077,663,570 |
| HMC | HMC Capital Limited | 3.57 | -2.86 | 2,253,994 | $1,103,852,122 |
| HLI | Helia Group Limited | 2.89 | -2.69 | 946,411 | $1,031,916,470 |
| HVN | Harvey Norman | 3.62 | -2.69 | 3,414,147 | $4,635,144,753 |
| SYA | Sayona Mining Ltd | 0.20 | -2.44 | 35,960,037 | $1,821,518,999 |
| CXO | Core Lithium | 0.85 | -2.01 | 8,889,136 | $1,613,864,611 |
| MEZ | Meridian Energy | 4.90 | -2.00 | 48,607 | $6,322,472,340 |
| FBU | Fletcher Building | 4.08 | -1.92 | 982,788 | $3,257,749,510 |
| MFG | Magellan Fin Grp Ltd | 8.65 | -1.87 | 622,162 | $1,599,102,069 |
| IMD | Imdex Limited | 2.24 | -1.75 | 641,470 | $1,148,988,597 |
| WDS | Woodside Energy | 33.25 | -1.74 | 2,643,615 | $64,253,692,251 |
| SMR | Stanmore Resources | 3.41 | -1.73 | 514,994 | $3,127,828,970 |
| BLD | Boral Limited | 3.52 | -1.68 | 218,719 | $3,949,056,540 |
Netwealth (ASX:NWL) fell 7% despite declaring that funds under management increased $3.4bn in the March quarter to $65.8 billion.
Bellevue Gold (ASX:BGL) was down 4% after saying that mining has started at the Vanguard open pit, and clearing is underway at the tailings storage facility (TSF). First production is on track for later this year.
