• ASX 200 down 0.41% on lower than normal volume 
  • Small cap index falls 1.17% and 7 out 11 sectors finish lower
  • RBA raises the cash rate by 25 basis points to 3%

 

The ASX200 was down 0.41% today.

The ASX Emerging Companies (XEC) index was 1.17% lower and overall, a total of 7 out of 11 underlying sectors were in the red.

Industrials was the strongest sector, rallying by 0.55%. Rail freight giant Aurizon (ASX:AZJ) jumped 1.37%, toll road company Atlas Arteria (ASX:ALX) was up 1.76%, and logistics player Brambles (ASX:BXB) rose a tidy 1.04%.

Information Technology was the biggest loser, dropping 2.11%. Accounting software company Xero (ASX:XRO) dropped a hefty 4.08%, and Wise Tech Global (ASX:WTC) lost 2.02%.

The Reserve Bank Board handed down its monetary policy decision and almost as CBA senior economist Kristina Clifton predicted, they’ve raised the cash rate by 25bp to 3.00% (she reckoned it would be 3.10%).

RBA Governor Philip Lowe said a further increase in inflation is expected over the months ahead, with inflation forecast to peak at around 8 per cent over the year to the December quarter. 

“Inflation is then expected to decline next year due to the ongoing resolution of global supply-side problems, recent declines in some commodity prices and slower growth in demand,” he said. 

“Medium-term inflation expectations remain well anchored, and it is important that this remains the case. 

“The Bank’s central forecast is for CPI inflation to decline over the next couple of years to be a little above 3 per cent over 2024.”

Clifton also predicted the Governor would soften the line from the November Statement that “the Board expects to increase interest rates further over the period ahead”.

“We think the key forward guidance statement will be changed to “the Board is likely to increase interest rates further over the period ahead” or “the Board is willing to increase interest rates further over the period ahead,” she said.

And Lowe and behold, the RBA said the board “expects to increase interest rates further over the period ahead, but it is not on a pre-set course.”

Basically, the RBA says they’re closely monitoring the global economy, household spending and wage and price-setting behaviour. 

“The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labour market,” Lowe said.

 

ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks:

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The biggest winner was Whitebark Energy (ASX:WBE) which is making progress on clean-up flow rates following the completion of hydraulic fracture stimulation operations at the Rex-4 development well at its Wizard Lake Oil and Gas Field in Alberta, Canada. 

Initial managed clean-up flow rates from the well were reported as ~230 barrels of fracture stimulation fluid per day on November 20 2022, at a pump-rate of 3 strokes per minute. 

It’s all part of the company’s strategy to bring the well into stabilised production.

“I believe that the results to date absolutely vindicate the strategy of resting the well prior to commencing pumping to recover the frac fluid, and subsequently managing the well production carefully to ensure long-term benefits in terms of well longevity and ultimate production potential,” Interim CEO Dr Simon Brealey said. 

“Gradually increasing cleanup flow rates are in line with our model to gradually manage flow and bring the well up to modelled ultimate post-cleanup rates over several weeks.” 

K-Tig (ASX:KTG) was awarded a research project under the US Navy’s National Shipbuilding Research Program to demonstrate the suitability of K-TIG technology for the repair and sustainment of US warships.

It’s a big deal for K-Tig, which will see it partner with Fincantieri Marinette Marine (FMM) and the Edison Welding Institute (EWI) to demonstrate that the K-TIG process meets the relevant US Navy codes for welding warships.

And Wellfuly (ASX:WFL) has come out of a trading suspension with a response to the ASX about why its price collapsed for no apparent reason on 29 November – alongside an announcement that it has executed a Memorandum of Understanding with target company The Brandbase.

Under that MoU, Wellfully is set to merge with The Brandbase – a group of private companies consisting of Natural Mojo GmbH, Skingood Garden UG and IG Group Services, currently under the ownership and control of Capital D, not a DJ but actually a London-based private equity firm.

 

ASX SMALL CAP LAGGARDS

Here are the worst performing ASX small cap stocks:

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TRADING HALTS

Suvo Strategic Minerals (ASX:SUV) – Cap Raise.

Forbidden Foods (ASX:FFF) – Cap Raise.

Bellevue Gold (ASX:BGL) – Cap Raise.

CardieX (ASX:CDX) – CDX has an announcement about the finalisation of a material contract in relation to its clinical trial revenue on the way. How excitement! 

Earlypay (ASX:EPY) – Earlypay has news of potential customer development. We’ll keep you posted.

4DS Memory (ASX:4DS) – Request for time to respond to an ASX price query.

Bellavista Resources (ASX:BVR) – Pushed into a trade suspension late in the day, with no reason supplied at the time of writing.

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