- ASX up +0.35% on Chinese inflation data
- China’s CPI moved higher in August, easing concerns of deflation
- Scrap metals recycler Sims Limited dipped 11pc after market update
The ASX jumped +0.22% on Monday as local traders tracked Wall Street and weighed inflation data from China.
China’s CPI increased in August by the slimmest of margins of +0.1% following a decline in July, easing deflationary pressures. Data shows rise in prices were helped by summer travel which boosted transportation and accomodation.
China’s credit also expanded more than expected in August after the central bank’s move to boost lenders. Analysts are hopeful the data is an indicator of the economy’s recovery, which has slowed since Q1.
On the ASX, gains in Financials and Mining were offset by losses in Tech and Healthcare.
Gold miners, along with iron ore and energy stocks mostly lifted after the Chinese reports. Vulcan Steel (ASX:VLS) was the best performing large cap, up over 5%.
Meanwhile, the upper house has finally secured support for the $6.4 billion housing program to tackle the domestic housing crisis. Under the deal, a new investment fund called the Housing Future Fund will be created to construct 30,000 new social and affordable homes over the next five years.
Demand for housing in Australia is being pushed by a combination of new entrants and a drop-off in people choosing to leave.
“This is pushing the need for housing higher, and may be contributing to more competitiveness for properties on the market, especially considering rental vacancy rates remain around record lows,” CoreLogic said.
BIG CAP WINNERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| VSL | Vulcan Steel | 8.40 | 5.00 | 277,608 | $1,051,268,576 |
| MFG | Magellan Fin Grp Ltd | 9.46 | 4.02 | 930,833 | $1,649,215,962 |
| GMD | Genesis Minerals | 1.65 | 3.62 | 11,206,976 | $1,649,767,087 |
| CDA | Codan Limited | 8.08 | 2.93 | 389,287 | $1,423,331,487 |
| BOQ | Bank of Queensland. | 5.82 | 2.92 | 2,789,490 | $3,713,278,485 |
| LNW | Light & Wonder Inc. | 119.72 | 2.58 | 159,039 | $1,435,365,404 |
| BEN | Bendigo and Adelaide | 9.22 | 2.56 | 1,172,943 | $5,104,018,461 |
| LYC | Lynas Rare Earths | 7.26 | 2.47 | 1,789,712 | $6,611,413,577 |
| NWL | Netwealth Group | 15.75 | 2.27 | 112,055 | $3,755,922,832 |
| ORA | Orora Limited | 2.75 | 2.23 | 2,894,276 | $2,273,996,315 |
| EVN | Evolution Mining Ltd | 3.67 | 2.09 | 3,820,546 | $6,595,490,086 |
| SIQ | Smartgrp Corporation | 8.58 | 2.02 | 343,550 | $1,117,156,386 |
| 360 | Life360 Inc. | 8.69 | 1.76 | 337,003 | $1,712,221,416 |
| IRE | IRESS Limited | 6.42 | 1.74 | 310,468 | $1,178,641,581 |
| WBC | Westpac Banking Corp | 21.53 | 1.70 | 2,422,347 | $74,287,159,243 |
Gold miner Genesis Minerals (ASX:GMD) rose after announcing high grade drill results at Gwalia. Drilling confirms the presence of a consistent high-grade core at the Gwalia underground mine. Results include: 1.7m @ 269g/t, 21.2m @ 24.1g/t, and 12.3m @ 30.1g/t/.
Bendigo and Adelaide Bank (ASX:BEN) announced that David Foster will succeed Jacqueline Hey as Chair following Hey’s decision to retire from the Board after more than 12 years. Foster was an executive for 25 years, and was most recently CEO of Suncorp Bank from 2008 to 2013.
BIG CAP LOSERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| SGM | Sims Limited | 13.75 | -10.89 | 1,224,830 | $2,980,790,854 |
| MP1 | Megaport Limited | 10.68 | -9.18 | 1,711,604 | $1,870,583,397 |
| JDO | Judo Cap Holdings | 0.99 | -6.40 | 7,038,479 | $1,166,323,465 |
| CHN | Chalice Mining Ltd | 2.96 | -4.98 | 3,492,455 | $1,209,675,875 |
| CEN | Contact Energy Ltd | 7.52 | -4.69 | 111 | $1,988,494,095 |
| OCL | Objective Corp | 11.80 | -4.45 | 19,157 | $1,175,704,600 |
| AZS | Azure Minerals | 2.71 | -4.24 | 2,605,100 | $1,222,915,830 |
| CNU | Chorus Limited | 6.82 | -4.08 | 150,901 | $3,093,100,300 |
| SQ2 | Block | 84.06 | -3.56 | 148,606 | $2,797,805,407 |
| LFG | Liberty Fin Group | 3.61 | -3.22 | 211,795 | $1,133,188,446 |
| BGL | Bellevue Gold Ltd | 1.45 | -3.18 | 5,539,961 | $1,694,980,704 |
| WHC | Whitehaven Coal | 6.05 | -3.13 | 3,092,979 | $5,220,388,892 |
Scrap metals recycling company Sims Limited (ASX:SIM) crashed -11% after providing a market update.
Sims said steel demand remained subdued, and the scrap price did not appear to be sufficient to stimulate robust scrap supply. The company further noted that competition for scrap remained strong, but inflow was subdued, and this was squeezing its margins.
The company faced these challenges across all regions, with some regions experiencing more pronounced effects than others. As a result, Sims anticipates Q1 FY24 EBIT to be approximately breakeven, but says it remains confident in the medium and long-term fundamentals of the business.