• ASX 200 down 1.6%
  • Small caps short 1.3%
  • Real Estate stocks hit ahead of FOMC meet

 

The benchmark killed Tuesday only to find its very own number was up today.

The ASX 200 has spent the session retracing yesterday’s 1.3% gains – driven by big shows from the blue chip banks and miners – by yielding up a further 0.3% to be down some 1.6% at the bell.

Flat for the previous session, the small cap (XEC) index is also down 1.5%.

The surrender of territory brings the benchmark back to where it wallowed some two-months ago with the pointy end of tomorrow morning’s US FED FOMC meet apparently now starting to torment the very souls of market participants.

Worst case scenario is a “Full Volcker,” 100 basis point rate hike which City Index says the street has already given a 25% possibility.

One out of four, I usually like those odds, but my spidey-sense is telling me the Smack Fairy is keen to whack something.

“Such a move,” Tony Sycamore, an actual well-trained and highly-professional market analyst, told Stockhead “would mark an intensification of the Federal Reserves’ battle to tame suborn inflation.”

Meanwhile, the best case scenario – a 75 bp rate hike – might appear to the casual observer like a piddling 0.25% improvement, but such is the street’s ridonkulously heightened state of anxiety and dread that those 25bps will be the difference between a hysterical relief rally or a death spiral of unending doom. Or similar.

On the plus side is the timely closure of local markets tomorrow for the Queen’s End public holiday. That will at least save local punters the opportunity of responding emotionally to tonight’s emotional Wall Street response to the FOMC decision.

Finally the far scarier, unnatural and apparently unyielding march of US bond yields this week has begun to flummox the rate-sensitive REIT and Property Sector.

Domain Group, Mirvac Group and REA Group fell around 3%.

 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks [intraday]:

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Avenira(ASX:AEV) is up strongly after locking in a non-binding deal with Lithium Iron Phosphate (LFP) battery manufacturer Aleees and the NT government.

Reubs, says the popularity of LFPs has exploded over the past year.

They’re ostensibly cheaper than NCA or NCM (nickel manganese cobalt) cells, mainly because they don’t require scarce and price-volatile metals such as nickel or cobalt.

AEV says that Aleees and the NT will now work towards building out a LFP battery cathode manufacturing facility in a phased capacity program starting at 5,000-10,000tpa in 2023/24 and potentially scaling to 200,000tpa by 2032.

“This MOU opens the door for Avenira to learn from Aleees about LFP battery cathode manufacturing technology and leverage this experience to optimise the production of phosphoric acid from the Wonarah Project and develop downstream assets to produce Australia’s first LFP pre cursor cathode material,” AEV boss Brett Clarke says.

 

ASX SMALL CAP LAGGARDS

Here are the best performing ASX small cap stocks [intraday]:

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WHAT YOU MAY’VE MISSED

We’re keeping this short because, like the rest of the market, we’re all getting ready to have a completely respectful day off work tomorrow to start getting ready for the AFL grand final and mourn the passing of the Queen.

But… life isn’t so peachy for embattled graphite miner Syrah Resources (ASX:SYR), which has had to throw down a trading halt for what it’s called a “labour-related operational interruption at Balama Graphite Operation”.

It’s the latest in a series of stop-start whipsaw action at Balama – the operation ground to halt thanks to Covid before restarting in Feb 2021, and earlier this year security issues in the region saw logistics and personnel movements halted for a week, thanks to the only decent road in and out of the mine was closed down by armed insurgents.

Those insurgents, it turned out, had attacked another nearby mine – and when that news broke, Syrah’s price slumped 14%.

There’s no clear word on precisely what the issue is this time around, but it’s another piece of highly unwelcome news from Syrah. The company has asked for the halt to run through to Monday 26 September.

TRADING HALTS

Zeotech (ASX:ZEO) – Capital Raise.

Syrah Resources (ASX:SYR) – Blood Pressure Raise. (See above for an explanation).

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