Closing Bell: A Friday fizzer for Aussie markets as energy and tech stocks drag
Local markets have had a sullen run of it on Friday, after US bond yields rose and tech stocks fell overnight.
Oil prices also crashed on an unhappy outcome at the headline OPEC+ meeting.
At match-out on Friday December 1, the S&P/ASX 200 (XJO) index was down 14 points, or -0.20%:
Around the traps, regional equity markets are all doing it tough on Friday.
One of the problems is the Caixin survey out of China, which has November Chinese manufacturing kicking absolute goals for factory activity.
That flies right in the face of official data released yesterday which detailed a second straight month of contraction.
The Caixin China General Manufacturing PMI rose to 50.7 last month, up from 49.5 in October, smacking market forecasts of 49.8 and pointing to the highest reading since August.
The Caixin read, miraculously, has both output and buying levels returning to growth, suggesting that Beijing’s mild recent efforts to excite the local economy are coming good – a direct contradiction of the official numbers out of the bureau of stats.
Caixin – a formerly independent Chinese financial media organisation, but now wholly state-run, also reports that business sentiment has suddenly lifted to a four-month peak.
The Friday performance of national equity markets of China’s satellite economies suggests the Caixin read is having trouble finding buyers, with most Asian markets lower near 4pm in Sydney.
After responding positively to Thursday’s official PMI’s, which suggested that Beijing may have to initiate further stimulus to promote activity, the ASX Materials sector has fallen significantly .
At home, broad-based selling has followed up Thursday’s surprise bonanza of gains. The IT sector is coming in for some heavy treatment, although at 3.45pm, the sector’s strong midweek performance still leaves it way out ahead and likely to end the last week of November – the strongest month of the year for the ASX benchmark – well ahead by more than +2%.
Elsewhere the Energy sector remains a weak point. A furtive OPEC+ has offered traders little to go on after the overnight conclusion of possibly the year’s most important meeting for the oil-producing cartel.
Members have reportedly agreed to trim output, except for Angola, which has come out in defiance of the group, led by Saudi Arabia and Russia.
West Texas Intermediate crude oil prices began today’s session in Sydney having tumbled almost 2.5% overnight to nearer US$75.00.
Elsewhere in larger cap company news, Fortescue Metals (ASX:FMG) is facing Friday with impressive resilience.
FMG is the most China exposed of the big three iron ore miners, while the brokers over at Jeffries took the stick to the stock and downgraded its rating from Buy to Hold, culling the target price to $23.90 at the same time.
The not as big as other Australians hasn’t looked too bothered by any of it:
At 3.45pm on Friday all 11 sectors were trading in the red with IT leading the bleeding.
And we’re surely still watching gold…
The price of gold is up around +0.2% at around US$2,040 an ounce late on Friday.
The safe haven looks comfortable heading into a third consecutive weekly rise, as markets worried about what’s next in the Middle East, with Israel and Hamas looking bound to restart hostilities following a near week-long pause and exchange of hostages. A weak US dollar and softer-than-expected US inflation data is also doing the precious metal favours.
And US markets as well…
Well. America’s Mega Tech stocks took the lead in a memorable November Wall Street comeback.
The Dow Jones – which rose overnight to new 2023 highs – managed to snap its three-month losing streak to close November +8.9% higher.
The S&P 500 was right alongside, higher by +0.4 overnight and ahead +8.9% for the month.
Falling -0.2% overnight, the tech heavy Nasdaq cleaned up in November to the tune of +10.7%.
On the economic front, US personal spending moderated while the latest jobless claims hit a two-year high.
Wall Street tonight will be all over the US Fed Chair, Jerome Powell, who does some Fedspeak, somewhere, but I forget.
Ahead of Friday trade in New York US Futures were mixed:
Here are the best performing ASX small cap stocks:
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Leading Friday by default is Hubify (ASX:HFY), which has jumped about +40% on Friday, after mopping up some loose shares.
Up around 40% and deservingly so late on Friday is Mitre Mining (ASX:MMC), which has grabbed for itself the rather high-grade Cerro Bayo silver and gold project in Chile.
Cerro Bayo was operating as recently as October last year, placed onto care and maintenance after 15 years, 45Moz of silver and 650,000oz of gold production.
But it still has 3.82Mt of ore at a grade of 206g/t for some 24.7Moz of silver equivalent and a string of high grade hits outside its resource including a heroic 5.5m at 868g/t Ag and 23.5g/t Au.]
Another digger up an even third on Friday is Perpetual Resources (ASX:PEC).
According to resident rock genius, Our Josh Chiat, the $7.5 million capped Perpetual has made its second visit to the Itinga prospect in the lithium valley region for Brazil’s Minas Gerais state.
Josh says PEC is prepping investors for imminent rock chip assay results, with geochemical sampling and in-field XRF analysis also due to begin soon after a first field trip over a month ago.
The ground is located around 15km from major lithium projects including those held by TSX-listed Brazilian lithium giant Sigma Lithium.
And Dalaroo Metals (ASX:DAL) has picked up $500,000 in cash and $500,000 in shares on Delta Lithium’s (ASX:DLI) tightly held register after inking a deal to sell the lithium, caesium and tantalum rights at its Lyons River project in WA’s emerging Gascoyne province.
That’s where the $3.3 million market capped DAL’s been focused on finding more of the high grade gold it’s struck at Goodbody just a few clicks down the road from DLI’s Yinnetharra discovery.
Here are the day’s worst performing ASX small cap stocks:
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Compumedics (ASX:CMP) – Pending an announcement regarding correspondece from the FDA regarding its Somfit sleep product