Closing Bell: ASX falls, energy stocks rally as Russia threatens to slash oil production

The ASX 200 fell 0.21% and the ASX XEC slips 1.05%
A 8 out of 11 sectors were lower led by Consumer Discretionary down 1.40%
Energy sector and stocks rally after Russia announces plans to slash oil production

The ASX 200 dropped 0.21% today and the ASX XEC was down 1.05%. A total of 8 out of 11 sectors lower, with Consumer Discretionary leading the laggards, declining 1.40%.

The Energy sector rallied by 1.78% with small caps like Helios Energy (ASX:HE8) up 6.06%, MMA Offshore (ASX:MRM) up 4% and Horizon Oil (ASX:HZN) up 3.13%.

It’s likely thanks to Putin, with the Russian Government announcing on Friday that it would cut oil production in March by around half a million barrels a day – thats about 5% of its current output.

Brent crude prices rose to$US86.60/barrel (~2.5%) on the news, and were trading at $US85.66 today.

NOT THE ASX

Shares in China ended lower last week as some investors reevaluated the Chinese economy’s rebound after Beijing scrapped its strict Covid-related restrictions.

“While most [investors] agree that overall economic growth will recover in China this year, there appears to be a lack of conviction on the magnitude of that rebound,” SPI Asset Management managing partner Stephen Innes said in a note.

European stocks also fell, and while they had a good start to the year, “it looks time to hand back some of those gains as economic pessimism rises again,” IG analyst Chris Beauchamp said.

In the US last week, markets finished lower, digesting the Federal Reserve’s 0.25 percentage point increase and a surprisingly strong jobs report.

With the fourth-quarter earnings season more than halfway through, fewer companies than normal are topping Wall Street profit expectations.

So far this earnings season, 58 companies have issued a negative profit outlook for the first quarter, according to FactSet.

Just 13 have issued a forecast that topped analyst expectations. About 70% of S&P 500 companies have reported results.

ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks:

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Code	Company	Price	%	Volume	Market Cap
KP2	Kore Potash PLC	0.017	42%	7,998,324	$7,982,186
INP	Incentiapay Ltd	0.007	40%	372,133	$6,325,318
MCT	Metalicity Limited	0.004	33%	50,152,030	$10,476,118
MGG	Mogul Games Grp Ltd	0.002	33%	3,358,833	$4,895,162
PNX	PNX Metals Limited	0.004	33%	350,000	$13,332,173
ROO	Roots Sustainable	0.002	33%	875,800	$1,558,829
VPR	Volt Power Group	0.002	33%	11,420	$16,074,312
RML	Resolution Minerals	0.009	29%	19,454,375	$7,558,223
ARE	Argonaut Resources	0.0025	25%	45,542,159	$12,723,743
WSR	Westar Resources	0.056	24%	68,140	$3,583,908
1CG	One Click Group Ltd	0.016	23%	506,250	$7,982,922
PSC	Prospect Res Ltd	0.215	23%	5,639,742	$80,895,406
RR1	Reach Resources Ltd	0.0055	22%	65,971,297	$8,595,228
BUY	Bounty Oil & Gas NL	0.012	20%	10,851,598	$13,705,010
XTC	Xantippe Res Ltd	0.006	20%	6,777,952	$51,725,174
VTM	Victory Metals Ltd	0.22	19%	1,020,760	$9,928,709
KGD	Kula Gold Limited	0.027	17%	276,422	$8,307,874
LML	Lincoln Minerals	0.034	17%	8,512,230	$16,674,527
TRM	Truscott Mining Corp	0.14	17%	8,349	$20,058,847
ZEU	Zeus Resources Ltd	0.021	17%	4,929,410	$7,889,400
TTB	Total Brain Ltd	0.007	17%	2,070,992	$802,327
PPG	Pro-Pac Packaging	0.36	16%	14,000	$56,323,190
UNT	Unith Ltd	0.045	15%	48,786,794	$29,045,732
EMU	EMU NL	0.004	14%	3,563,135	$2,405,438
JPR	Jupiter Energy	0.032	14%	62,457	$34,435,803

The small cap leader today was Metalicity (ASX:MCT) who scored permit EPM 28653, expanding the potential exploration area for copper/cobalt mineralisation at its Mt Surprise Project in North Queensland.

Recent fieldwork at Mt Surprise has identified a copper trend with high grade rock chip samples of up to 11.65% copper and 66.39g/t silver, combined with anomalous cobalt mineralisation on assays of up to 650ppm.

“With assay results from over 300 ultrafine soil samples due shortly and the wet season coming to an end in the coming weeks, this is a very timely and exciting development,” MD Justin Barton said.

The company plans to focus initial fieldwork on the potential strike between recent fieldwork activities and historical copper recordings from the Geological Survey of Queensland along strike.

PNX Metals (ASX:PNX) has identified multiple high grade gold targets at its Burnside project in the NT, with rock chip sampling returning grades up to ~12g/t.

Multiple targets, with the potential to host economically significant gold mineralisation, have been identified and the plan is to delineate additional ‘standalone’ gold deposits that can be processed through the company’s proposed Fountain Head Plant.

“Away from the known deposits, historic mines and prospects, minimal exploration has taken place,” MD James Fox said.

“We look forward to drill testing these prospective ‘gold’ corridors early in 2023, after the NT wet season, and continuing to define other targets in our Pine Creek land package.”

Argonaut Resources (ASX:ARE) is among the winners despite some issues in Zambia, where its Lumwana West copper-cobalt exploration licence was recently cancelled and then granted to another party within 30 days.

ARE is appealing and says at the time of the purported cancellation, the company’s 90% held subsidiary, Mwombezhi Resources, was operating in full compliance with all licence conditions and other regulatory requirements.

The company has previously had a bit of trouble in other countries too, In August, the South Australian Supreme Court revoked an Aboriginal Heritage Act authorisation over the Murdie copper project – putting a halt to exploration plans.

And ARE’s uranium IPO Orpheus Minerals was withdrawn in December due to lack of interest.

Reach Resources (ASX:RR1) has picked up four tenements prospective for lithium, rare earth element (REE) and manganese mineralisation in WA.

Notably, the lithium tenement Morrissey Hill project has widespread outcropping pegmatites, and is directly adjoining, and contains the same geology as, Red Dirt Metals’ (ASX: RDT) Yinnetharra Lithium Project.

ASX SMALL CAP LAGGARDS

Here are the worst performing ASX small cap stocks:

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Code	Company	Price	%	Volume	Market Cap
EX1	Exopharm Limited	0.018	-72%	19,159,733	$10,218,750
ALT	Analytica Limited	0.001	-33%	2,538	$6,920,702
MTL	Mantle Minerals Ltd	0.002	-33%	8,528,000	$16,036,815
NXL	Nuix Limited	1.11	-27%	5,921,225	$480,731,913
GES	Genesis Resources	0.006	-25%	66,666	$6,262,730
GGX	Gas2Grid Limited	0.0015	-25%	30,000	$8,140,204
GLV	Global Oil & Gas	0.0015	-25%	8,775,078	$6,857,606
OAU	Ora Gold Limited	0.006	-25%	13,189,616	$7,873,850
SGR	The Star Ent Grp	1.49	-21%	54,922,594	$1,785,026,644
KNM	Kneomedia Limited	0.008	-20%	4,386,221	$13,537,853
RGS	Regeneus Ltd	0.013	-19%	4,216,864	$4,902,991
CTN	Catalina Resources	0.009	-18%	3,408,940	$13,623,356
CTO	Citigold Corp Ltd	0.005	-17%	150,000	$17,001,955
APX	Appen Limited	2.78	-16%	5,720,460	$409,841,902
HVY	Heavymineralslimited	0.16	-16%	33,411	$7,331,198
PBL	Parabellumresources	0.38	-16%	698,101	$24,625,125
MHK	Metalhawk.	0.14	-15%	9,531	$10,681,340
AHQ	Allegiance Coal Ltd	0.017	-15%	9,494,674	$20,097,919
CL8	Carly Holdings Ltd	0.017	-15%	616,686	$4,087,408
FFT	Future First Tech	0.023	-15%	64,855	$19,165,587
MHC	Manhattan Corp Ltd	0.006	-14%	9,181,905	$10,683,951
NZS	New Zealand Coastal	0.003	-14%	31,172	$3,944,518
TSL	Titanium Sands Ltd	0.012	-14%	861,349	$19,689,570
NNL	Nordicnickellimited	0.335	-14%	52,857	$22,799,402
FFF	Forbidden Foods	0.02	-13%	50,000	$2,972,839

LAST ORDERS

Voluntary Administrators have been appointed at waste management stock M8 Sustainable (ASX:M8S), which was building a flagship $10.8m landfill facility in Gingin, WA.

The Administrators intend to “immediately explore options for the sale and/or recapitalisation of M8S”. Whilst in administration, the shares of the $5m capped minnow will remain suspended from trading.

M8S listed December 2019 after raising $19.5m at 20c per share.

VIP Gloves (ASX:VIP) will sell some Malaysian real estate for ~$5.6m and then immediately lease it back from the buyer. The lease payments for the first 3 years are set at ~$39,800 per month.

“The sale of land and buildings will provide a significant cash injection for the company, with funds used to eliminate financial borrowings and provide ongoing working capital,” it says.

VIP stopped making gloves in the December quarter “due to the average selling price of gloves continuing to decrease at a faster pace than the decrease in cost of production”. It is currently seeking new business activities.