The relief rally is real, as US inflation cools. Picture: Getty Images
ASX Large Caps: Relief rally for the ASX as US inflation cools; lithium stocks gain
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- Lithium stocks gained, while gold stocks fell
- The Fed will announce its rates decision tonight
- CSL dropped 7pc after downgrading profit forecast
Mining stocks outperformed all other sectors today as the ASX trundled to a +0.3% close.
Lithium stocks rallied as the price of battery-grade lithium soared 7% on the Shanghai Metals Market today. Overnight, US lithium giants such as Albemarle also jumped on market sentiment.
The healthcare sector was weighed down by heavyweight CSL (ASX:CSL), which tumbled 6% on a profit downgrade.
Gold stocks meanwhile were among the worst-performing in the mining sector despite a higher bullion price as US inflation hit the lowest levels since early 2021.
The cooling inflation, which dropped from 5.5% to 5.3% YoY, is fuelling bets that the Fed will have no problem skipping a rate hike later tonight.
“Wall Street is becoming a little bit hopeful here that an FOMC June skip could eventually become a July pause,” said Oanda analyst, Edward Moya.
While a hold tonight is a done deal, traders are still flipping coins on whether the Fed will continue the hike in July.
Elsewhere, economists believe China’s economy will likely have slowed further in May, as the market awaits tomorrow’s official data.
Barclays’ economists expect the PBOC (China’s central bank) to accelerate its monetary easing, with a reduction in interest rates in every quarter until Q1 of 2024, according to a report from Bloomberg.
In the meantime, China is preparing a broad package of stimulus which include measures designed to boost areas such as real estate and domestic demand.
BIG CAP WINNERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| EMR | Emerald Res NL | 2.09 | 12.97 | 5,880,307 | $1,101,604,641 |
| MIN | Mineral Resources. | 71.51 | 5.29 | 1,223,842 | $13,189,553,785 |
| FMG | Fortescue Metals Grp | 21.89 | 5.24 | 8,167,911 | $64,042,470,294 |
| AKE | Allkem Limited | 16.08 | 4.76 | 3,755,834 | $9,788,051,620 |
| HGH | Heartland Group | 1.54 | 4.42 | 3,140 | $1,043,197,554 |
| KAR | Karoon Energy Ltd | 1.97 | 4.09 | 2,500,874 | $1,067,093,638 |
| PLS | Pilbara Min Ltd | 4.91 | 3.48 | 34,143,841 | $14,211,408,660 |
| CCP | Credit Corp Group | 18.25 | 3.46 | 135,175 | $1,200,699,340 |
| BHP | BHP Group Limited | 45.81 | 3.43 | 8,995,957 | $224,365,192,425 |
| IGO | IGO Limited | 15.20 | 3.40 | 2,291,362 | $11,131,836,851 |
| BSL | BlueScope Steel Ltd | 20.61 | 3.28 | 1,023,619 | $9,151,651,909 |
| RIO | Rio Tinto Limited | 116.44 | 3.15 | 1,205,363 | $41,902,886,236 |
| MFG | Magellan Fin Grp Ltd | 8.40 | 3.07 | 712,252 | $1,478,669,977 |
| IAG | Insurance Australia | 5.26 | 3.04 | 7,639,494 | $12,494,536,160 |
| LTR | Liontown Resources | 2.89 | 3.04 | 8,435,866 | $6,161,345,288 |
| DTL | Data#3 Limited | 7.05 | 2.92 | 138,417 | $1,059,004,410 |
| SIQ | Smartgrp Corporation | 7.91 | 2.86 | 412,213 | $1,020,726,167 |
| STX | Strike Energy Ltd | 0.46 | 2.78 | 2,819,184 | $1,139,198,273 |
Lithium miner IGO (ASX:IGO) rose 4% on the lithium price lift today.
Insurance Australia (ASX:IAG) rose 3% after providing a market update at its Investor Day. The insurer says it is on target to achieve its FY23 guidance and has upgraded its medium-term ROE target by by 1% to 13%-14%.
BIG CAP LOSERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| SLX | Silex Systems | 4.03 | -6.93 | 566,032 | $1,019,385,647 |
| CSL | CSL Limited | 287.40 | -6.85 | 1,667,904 | $148,820,564,404 |
| CMM | Capricorn Metals | 4.20 | -6.25 | 907,694 | $1,684,292,624 |
| SMR | Stanmore Resources | 2.50 | -5.13 | 1,936,308 | $2,370,659,997 |
| PDN | Paladin Energy Ltd | 0.72 | -4.93 | 12,870,461 | $2,264,911,300 |
| BGL | Bellevue Gold Ltd | 1.20 | -4.38 | 5,703,818 | $1,418,375,309 |
| BOE | Boss Energy Ltd | 3.12 | -4.00 | 1,210,756 | $1,145,881,302 |
| AIA | Auckland Internation | 7.54 | -3.70 | 874,125 | $11,530,075,403 |
| ARB | ARB Corporation. | 27.90 | -2.55 | 175,442 | $2,350,502,930 |
| XRO | Xero Ltd | 110.99 | -2.31 | 422,236 | $17,177,056,489 |
| MGR | Mirvac Group | 2.18 | -2.24 | 8,436,212 | $8,799,268,284 |
| GOR | Gold Road Res Ltd | 1.75 | -2.23 | 1,708,637 | $1,930,374,290 |
Australia’s biggest healthcare company, CSL (ASX:CSL) , dropped 7% after releasing a market update. CSL said foreign currency movements will impact the company’s FY23 forecast profit. CSL now expects a negative foreign currency impact of around USD $230 million to $250 million, up from USD $175 million anticipated at the time of the half-year result.
Auckland International Airport (ASX:AIA) fell after announcing a change to its dividend policy in light of the large-scale investment that is taking place to upgrade its aeronautical infrastructure.
Auckland Airport’s revised dividend policy is as follows:
“Auckland Airport’s dividend policy is to pay 70% to 90% of underlying net profit after tax (excluding unrealised gains and losses arising from a revaluation of property or treasury instruments and other one-off items)… noting that, in special circumstances, the directors may consider the payment of ordinary dividends above or below this range, subject to the company’s cash flow requirements, forecast credit metrics and outlook at the time.”
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