- Energy stocks dragged ASX lower
- Core Lithium got a Sell rating from Goldman Sachs
- RBA says it’s still looking into a Central Bank Digital Currency (CBDC) in Australia
Energy stocks dragged local shares lower on Thursday as more talks of a recession jolted markets worldwide.
At the close today, the ASX 200 was down 0.6% while the Energy index sank by over 2%.
Overnight, crude prices declined around 2.5% as energy traders quickly abandoned bullish bets that we will see a price spike once the Russian cap on crude oil is put in place.
“It seems oil markets are only caring about a steady deterioration with the demand outlook,” says OANDA analyst Edward Moya.
The worst performing large cap today was infrastructure developer Downer EDI (ASX:DOW).
Downer plunged 21% after admitting to accounting errors from as far back as 2020.
The company said it has identified certain accounting irregularities in its Australian Utilities business involving historical misreporting of revenue and work in progress in one of Downer’s maintenance contracts.
Based on information currently available, the irregularities resulted in an overstatement of pre-tax earnings in the order of $30 million – $40 million at the end of November 2022, accumulated across financial years 2020, 2021, 2022 and 2023.
Meanwhile, Australian trade surplus decreased $227m in October, according to ABS data today.
Exports fell $568m (0.9%) driven by non-monetary gold, while imports fell $340m (0.7%) driven by fuels and lubricants.
RBA assistant governor for financial system Brad Jones spoke this morning on the topic of The Economics of a Central Bank Digital Currency (CBDC) in Australia.
Jones said the RBA will keep an open mind on the development of CBDC currency, saying that many things have to still be considered.
“The bottom line here is that much will depend on CBDC design choices, and there are many complex issues that would need to be carefully weighed ahead of any decision to proceed with issuing a CBDC,” Jones said.
BIG CAP WINNERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| CHN | Chalice Mining Ltd | 629 | 12.93 | 4,722,830 | $2,095,975,371 |
| BGL | Bellevue Gold Ltd | 115 | 7.98 | 4,857,653 | $1,115,616,632 |
| WAF | West African Res Ltd | 113 | 5.12 | 2,725,505 | $1,097,986,235 |
| SLR | Silver Lake Resource | 133.5 | 3.49 | 3,678,494 | $1,199,370,190 |
| EVN | Evolution Mining Ltd | 288.5 | 3.04 | 13,917,883 | $5,138,045,693 |
| TNE | Technology One | 1383 | 2.83 | 521,028 | $4,365,434,650 |
| IMU | Imugene Limited | 18.5 | 2.78 | 4,804,018 | $1,154,108,827 |
| NCM | Newcrest Mining | 2130.5 | 2.43 | 2,478,692 | $18,589,143,498 |
| CHC | Charter Hall Group | 1270 | 2.42 | 1,538,559 | $5,865,165,268 |
| MPL | Medibank Private Ltd | 299 | 2.40 | 7,298,929 | $8,041,689,461 |
| IPH | IPH Limited | 873 | 2.34 | 486,522 | $1,922,816,649 |
| IFT | Infratil Limited | 845 | 2.18 | 54,234 | $5,997,192,081 |
| PNV | Polynovo Limited | 194 | 2.11 | 1,399,253 | $1,287,207,284 |
| AIZ | Air New Zealand | 73.5 | 2.08 | 1,894,713 | $2,425,294,307 |
| JHX | James Hardie Indust | 2912 | 2.00 | 1,333,794 | $12,723,448,023 |
Chalice Mining (ASX:CHN) jumped 13% on news that it hit promising new sulphide mineralisation at the Hooley Prospect.
Chalice said that it hit mineralisation in all five reconnaissance holes from three drill sites along 1.8km of strike.
Air New Zealand (ASX:AIZ) was up 3% following a half year earnings guidance upgrade.
AIZ now expects half year earnings to be in the range of NZ$295 million to NZ$325 million, versus the previous guidance of NZ$200 million to NZ$275 million.
BIG CAP LOSERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| DOW | Downer EDI Limited | 376 | -21.67 | 23,356,710 | $3,224,637,062 |
| CXO | Core Lithium | 119.25 | -8.97 | 45,618,281 | $2,408,198,439 |
| LTR | Liontown Resources | 180.5 | -6.72 | 16,774,345 | $4,250,102,402 |
| S32 | South32 Limited | 412.5 | -4.73 | 20,700,135 | $19,813,889,073 |
| HUB | HUB24 Ltd | 2574.5 | -4.47 | 185,731 | $2,157,567,897 |
| KAR | Karoon Energy Ltd | 206.5 | -4.40 | 2,414,434 | $1,215,396,049 |
| PLS | Pilbara Min Ltd | 450.5 | -4.35 | 22,008,314 | $14,119,923,718 |
| IGO | IGO Limited | 1490 | -4.06 | 2,129,872 | $11,760,369,136 |
| LFG | Liberty Fin Group | 383 | -3.77 | 21,920 | $1,208,328,000 |
| WDS | Woodside Energy | 3468 | -3.67 | 6,206,315 | $68,354,991,756 |
| 360 | Life360 Inc. | 584 | -3.47 | 546,928 | $1,178,479,682 |
| APM | APM Human Services | 266.5 | -3.44 | 610,819 | $2,531,422,171 |
| SYA | Sayona Mining Ltd | 22.25 | -3.26 | 21,067,628 | $1,997,327,253 |
| VNT | Ventiaservicesgroup | 257 | -3.02 | 476,156 | $2,267,033,779 |
| AKE | Allkem Limited | 1339 | -2.97 | 3,402,926 | $8,799,681,587 |
| WEB | Webjet Limited | 626.5 | -2.87 | 2,281,119 | $2,456,492,072 |
| LKE | Lake Resources | 94.75 | -2.82 | 4,098,208 | $1,356,516,241 |
Core Lithium (ASX:CXO) fell more than 6% on no specific news.
However Goldman Sachs had issued a sell call on CXO with a $1 price target.
Goldman wrote in a note:
“Our commodity team now expect lithium prices through 1H23 to reflect the near-term tightness and lagging spodumene contract price pass-through before declining over 2H23.
“While we see earnings support for the Australian stocks over 12-18 months on price lags, on a 12m view we expect lithium stock prices to fall as lithium prices decline from record peaks.”