• ASX sinks to lowest level in more than two months
  • Pro Medicus surges 11pc on $140m deal
  • Coal stocks upgraded by Morningstar

 

Local shares retreated by -0.4% today as soaring US bond yields heaped pressure on equities. The benchmark ASX200 is now trading at the lowest level in more than two months.

Healthcare was the only sector in the green today, while Real estate, Tech and Mining took the brunt of the selloff.

China-sensitive Materials sector was down 1.5% as iron ore stocks struggled.

Gold miners were also down, with leading stocks Evolution (ASX:EVN) and Genesis Minerals (ASX:GMD) down 2.5% and 5% respectively.

Elsewhere, stocks in Asia fell as well, in a sign that most investors have not recalibrated their rates expectations. This comes as JP Morgan chief Jamie Dimon warns that markets may not be ready for US rates to go as high as 7%.

“If they are going to have lower volumes and higher rates, there will be stress in the system,” Dimon told Bloomberg.

“Warren Buffett says you find out who is swimming naked when the tide goes out. That will be the tide going out.”

 

Coal stocks get upgrades by Morningstar

Meanwhile, research firm Morningstar’s analyst Jon Mills has updated his fair value estimates on coal stocks New Hope (ASX:NHC) and Whitehaven (ASX:WHC) after revising assumptions on near-term thermal and metallurgical coal prices.

Mills’ fair value for Whitehaven has now risen by 3% to $9.80 per share, while New Hope’s fair value estimate increases by 3% to $6.30.

“Our updated fair value estimates also incorporate our latest foreign exchange rate assumptions, along with higher coal royalty rates imposed by the New South Wales government,” said Mills.

New South Wales will scrap the cap on domestic thermal coal prices effective July 1, 2024, which will be replaced with a 2.6% increase in state coal royalties from that date.

“However, higher royalties are more than offset by improved near-term thermal and metallurgical coal prices and weaker exchange rates versus the US dollar,” said Mills.

 

BIG CAP WINNERS

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Imaging company Pro Medicus (ASX:PME) surged 10% after signing a $140m, 10-year deal with Baylor Scott & White Health.

Under the deal, PME’s Visage will replace the legacy PACS and vendor neutral archive throughout the BSWH network. The contract is for the full stack of platforms – Visage 7 Viewer, Visage 7 Open Archive and Visage 7 Workflow.

Met coal producer Coronado Global (ASX:CRN)  rallied after announcing Czech-based company Sev.en Global will acquire a majority stake in Coronado after acquiring a 51% stake from the Energy & Minerals Group.

Suncorp Group  (ASX:SUN) rose 0.4% after its banking chief, Clive van Horen, announced his departure in December to pursue an opportunity in the non-bank financial services sector. His announcement comes as Suncorp tries to still work through the proposed sale of its banking unit to ANZ Bank (ASX:ANZ).

 

BIG CAP LOSERS

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Liontown (ASX:LTR) fell as Gina Rinehart lifted her strategic stake in Liontown to 10.69%, up from the 7.72% disclosed two weeks ago.

Her increased stake is seen as a move to block battery chemical giant Albemarle’s $6.6 billion proposed takeover of the lithium miner.

Air New Zealand (ASX:AIZ) fell 1.5% after the airline said it could not provide guidance at this stage due to uncertain and volatile macroeconomic factors, including higher fuel prices and volatile currency exchange.