Closing Bell: ASX resets on mild mannered Monday gains

ASX rises circa 0.5pc
Consumer stocks in focus this week
SGQ and PHX lead small caps

Aussie stocks have closed higher on Monday as IT and retail stocks added strength to sentiment.

The S&P/ASX200 closed higher, gaining 36.00 points or 0.46% to 7,813.70.

The darkness of the recent US economic-inspired market volatility, with a few too many recent indicators suggesting the US Federal Reserve has kept interest rates too high for too long, is in the rear view mirror for another session at least.

The volatility (VIX) index fell to 20.37% as calm returned to the market after a spike earlier last week.

Nine of of 11 ASX sectors ended higher on Monday.

Here’s a heat map:

Information Technology was the best performing sector, gaining almost 2% and rebounding from its recent decline. The Aussie Tech sector is down -1.75% over the past week of trade. Not bad considering last Monday’s shellacking.

The top performing stocks in the ASX200 index were Tabcorp Holdings (ASX:TAH) and JB HiFi (ASX:JBH), up 9.3% and 8.3% respectively.

The index has lost 1.6% for the last five days, and is now about 4.1% off its recent record high.

Consumer stocks bit back with some force on Monday as a raft of corporate results a likely mover of the local market this week.

JBH dropped a special dividend of $0.80 a pop this morning after reporting better than expected sales for the first month of the new financial year.

With US consumer data for July to be released on Wednesday in New York, the positivity leached into the broader local consumer sector.

Harvey Norman Holdings (ASX:HVN) did well. Super Retail Group (ASX:SUL) jumped circa 4.5%.

Likewise, the digital platform Carsales.com (ASX:CAR) was up almost 3% after lifting revenue by some 40% to $1.1bn.

Elsewhere on Monday, the local competition regulator put off its ruling on whether to allow the merger of Chemist Warehouse and Sigma Healthcare, fearing the deal which would create an $8.8bn listed pharma-retailing behemoth is not a problem it can answer until at least October.

On the bummer side of the ASX200 ledger is Aurizon Holdings (ASX:AZJ) which has shed more than 5%, despite the freight operator calling a $150 million of share buybacks and a 25% boom in annual net profit.

Beach Energy (ASX:BPT) is down almost 9% following writedowns on oil and gas leading to a FY net loss of $475.3m.

BHP (ASX:BHP) and Rio Tinto (ASX:RIO) were struggling in the face of industrial relations changes and as Singapore iron ore futures dropped circa 1.6% to $US99.45, back to near four month lows.

JB Hi-Fi really defied expectations of a consumer spending slowdown, reporting a better-than-feared FY24 result and declaring a special dividend.

Josh Gilbert, Market Analyst at eToro, said that the share price opened 6.5% higher this morning nudging a record high of $74.66.

“JB Hi-Fi delivered a solid full-year result this morning, with net income beating estimates and the announcement of a special full-franked dividend,” he said.

“In what has been a tough period for retailers, there was undoubtedly a grey cloud looming over JB Hi-Fi’s results today, but these figures show resilience, and the market will be duly impressed.

The company demonstrated effective cost control, with EBITDA margins of 6.75% compared to analyst expectations of 6.5%. Despite the impressive results, JB Hi-Fi shares have now rallied 36% year-to-date, with a price-to-earnings ratio of 17.5x.

“These results demonstrate how we continue to see consumers saying one thing and doing another,” Gilbert said.

“Consumer confidence is highly pessimistic, but JB-HiFi’s July update showed sales have grown across all areas of the business year-over-year. This strong indicator of increasing consumer spending comes at a time when interest rates are sitting at their highest level in a decade.

“The tax cuts implemented at the start of the financial year could be one of the key drivers of sales through July, ultimately offering consumers some ‘discretionary’ cash that they wouldn’t have had this time a year ago, which has given them the freedom to splurge on new electronics.”

JBH shares are up over 40% in the last 12 months, Josh notes.

“And although the retailer’s time in the sun won’t last forever, this is a great result at a time when many had expected a lot worse.”

Not the ASX

Gold steadied near $2430 per ounce on Monday as investors shifted their focus to upcoming US inflation data this week for clues on the Federal Reserve’s monetary policy path.

The Hang Seng was slightly higher at lunch in Hong Kong, while the Shanghai Composite rose 0.2% toward 2870 while the Shenzhen Component gained 0.2% to 8411 on Monday, recouping some losses from the previous session and tracking global markets higher amid an improving risk sentiment.

The BSE Sensex fell 394 points or 0.5% to 79,312 in morning trade on Monday after gaining in the prior two sessions as traders cautiously after the latest Hindenburg report and ahead of India’s July inflation data today.

Over the weekend, US-based short seller Hindenburg alleged the head of India’s markets regulator held as take in offshore funds used by the Adani group.

EU indices ended higher on Friday, with the Euro Stoxx 600 up 0.57% to 499.19, led by gains in the real estate and travel sectors. The FTSE rose 0.24%, and the DAX gained 0.31%.

The French central bank reckoned that growth in France would rise by 0.35% in Q3, bumped by the Olympics.

The CAC rose by 0.31% on Friday.

In London, positive news from the construction sector lifted homebuilders after Bellway, a British builder, provided an upbeat forecast due to government plans to increase housing stock.

Novo Nordisk jumped 6.3% on Friday after recovering from earlier losses due to a lower profit outlook. In Germany, chemical conglomerate Lanxess surged 6.0% after reporting improved cash flows. German inflation data met expectations at 2.6%, and interest rates were little changed.

US markets climbed higher on Friday, capping off a tumultuous week where the S&P 500 finished essentially unchanged. The S&P 500 rose 0.47% to close at 5,344.16, the Dow inched up 0.13% to 39,497.54, and the Nasdaq rallied 51 points, or 0.51%, to 16,745.3.

The trading session was quiet, with minimal individual stock news.

Big and scary tech like Nvidia and Meta were down slightly by 0.2% and 0.07%, but nothing outrageous.

The lack of significant movement was noteworthy as investors digested the week’s data. The banking sector remained unchanged. The summary of corporate earnings to date have been neither hot nor cold, they have come in with a 4.1% above on expectations, compared to the historical average of beating expectations by 4.2% according to LSEG data.

This week, a lot like the ASX, consumer demand will be in focus as Walmart and Home Depot report their Q2 earnings.

US Futures at 4pm in Sydney:

ASX SMALL CAP LEADERS

Today’s best performing small cap stocks:

Swipe or scroll to reveal full table. Click headings to sort:

Code	Name	Price	% Change	Volume	Market Cap
ME1	Melodiol Glb Health	0.002	50%	6,954,415	$789,420
ODE	Odessa Minerals Ltd	0.003	50%	5,066	$2,086,565
RMX	Red Mount Min Ltd	0.002	50%	500,000	$3,423,577
SGQ	St George Min Ltd	0.034	36%	33,661,900	$24,713,511
HCL	Highcom Ltd	0.295	34%	3,331,166	$22,590,188
LPD	Lepidico Ltd	0.002	33%	6,103,767	$12,883,687
MEL	Metgasco Ltd	0.004	33%	594,155	$4,342,760
MKL	Mighty Kingdom Ltd	0.004	33%	546,263	$9,647,829
SI6	SI6 Metals Limited	0.002	33%	850,000	$3,553,289
SLZ	Sultan Resources Ltd	0.008	33%	87,454	$1,185,519
WML	Woomera Mining Ltd	0.004	33%	16,181,344	$3,654,417
ZMM	Zimi Ltd	0.018	29%	2,011	$1,773,306
KRR	King River Resources	0.013	25%	6,741,753	$15,282,208
AVE	Avecho Biotech Ltd	0.003	25%	80,883	$6,338,594
VML	Vital Metals Limited	0.003	25%	1,100,000	$11,790,134
ADD	Adavale Resource Ltd	0.003	20%	765,058	$2,663,163
BNL	Blue Star Helium Ltd	0.006	20%	3,028,952	$9,724,426
ENT	Enterprise Metals	0.003	20%	3,333,333	$2,733,293
NES	Nelson Resources.	0.003	20%	187,500	$1,533,986
SUM	Summitminerals	0.215	19%	1,572,442	$12,938,029
EMC	Everest Metals Corp	0.125	19%	581,339	$19,559,726
DY6	Dy6Metalsltd	0.066	18%	82,855	$2,823,007
PHX	Pharmx Technologies	0.035	17%	889,958	$17,955,204

In late mail on Monday, Pharm X stock has surged just a few days after tanking on the bombshell news of failed legal proceedings against Fred IT.

PharmX Technologies will be required to repay to Fred IT the circa $8.1 million Fred paid to PharmX on 3 June 2023, and to pay to Fred IT as yet unquantified additional amounts for interest on that sum, and Fred IT’s costs of the trial and the appeal.

Final Orders have not yet been made PHX said, but the Court of Appeal has ordered that the parties’ positions on appropriate Orders (agreed or otherwise) be communicated to the Court by 4.00pm on 16 August 2024.

“While the outcome is obviously disappointing, the Board and Management have prioritised the development of a sustainable and resilient business model alongside a culture of prudent financial management over the past 2 years, whereby they ring-fenced the previous payment made by Fred IT (and accruing interest), acknowledging the potential risks associated with the appeals”

“The Board presently anticipates that this outcome will have no material impact on its underlying business, nor will it slow the execution and delivery of its commercial growth strategy. PharmX Technologies is carrying a provision of $9.8 million against the possibility of such an outcome in the appeals.

In addition, the business had cash holdings of $13.1 million at 30 June 2024,” PharmX said last week.

Still rising is St George Mining (ASX:SGQ) which dropped an urgent sounding update on its proposed acquisition of the “advanced, high-grade niobium-REE Araxá Project in Minas Gerais, Brazil.”

SGQ has shot up 40% on refuting claims on social media that its ownership of the world-class Araxa niobium project in Brazil was impeded by environmental concerns.

“The Company is aware of misinformation circulating in online chat rooms and social media regarding Araxá – particularly claims that an active tailings dam is located within the Project area and that significant high-grade mineralisation discovered at the Project is beneath the tailings dam.

“This information is false and not correct.” (their emphasis)

The dispute is over the B4 tailings dam not being rehabilitated yet on SGQ’s 831.972/1985 tenement which contains high-grade niobium underneath, yet the company notes that CBMM, the previous owner, had in 2023 announced that it was dry and sealed.

CBMM is the world’s largest producer of niobium (80%) with its mining operation right next door.

Independent technical consultants contracted by SGQ have indicated that open pit mining can be established on tenement 831.972/1985, with no impediments from Dam B4, though these findings are preliminary in nature and subject to final geotechnical studies, which are currently underway.

Up strongly as well is Woomera Mining (ASX:WML) which alongside Kincora Copper (ASX:KCC) announced a deal in the shape of a legally binding earn-in term sheet which grants Woomera a 100% earn in interest in KCC’s Bronze Fox Project, located in the world-class Southern Gobi copper belt in Mongolia.

The juicy bits:

• Bronze Fox includes an Inferred Mineral Resource of 194.1 Mt of 0.2% Cu and 0.07 g/t Au containing 426kt of Cu and 437koz Au for the West Kasulu prospect
• The Inferred Resource covers a small section of one of three large near surface porphyry complexes with a number of drill ready priority targets defined
• Woomera can earn an 80% interest in the Project (in two phases) by spending US$4m (with an election to acquire 100% once WML has earned its 80% interest)
• Drilling program scheduled to commence in the September quarter testing new greenfield and resource expansion targets
• Firm commitments have been received for a $1.7m share placement with an additional $0.3m Share Purchase Plan to be offered to eligible shareholders.

Si6 Metals (ASX:SI6) says it has received 266 soil sample assay results at its Padre Paraíso lithium prospect in the Lithium Valley, Brazil, where “significant anomalous lithium zones have been identified with strong lithium potential.”

The Padre Paraiso prospect is located ~20km from Sigma Lithium Corp’s high purity “Green Lithium” concentrate mine (Grota do Cirilo Project) – with a 85.6Mt measured and indicated resource at 1.4% (Li2O1).

SI6 says the high-grade anomalous lithium soil zones “demonstrate a significant lithium discovery potential within a confirmed and extensive 3km pegmatite corridor.”

Li-S Energy will develop a production line to produce high-quality lithium foils from lithium metal ingots after Industry Minister Ed Husic announced an Industry Growth Program (IGP) Commercialisation and Growth Grant of $1.7 million for Li-S Energy (ASX:LIS) to develop Australia’s first lithium foil production line.

Lithium metal foil is used for the anode of both lithium sulfur and lithium metal batteries, but current imported supply has limited quality and is not optimised for Li-S cells. In addition to supplying foil for its own cell production, the Company intends to market the foils to both domestic and international customers.

“With Australia currently producing 52% of the world’s lithium ore1 and global demand for lithium metal foil forecast to reach US$51 billion by 2032, Australia has a unique opportunity to capitalise on this emerging market,” Dr Lee Finniear, CEO of Li-S Energy, said.

Elsewhere, Everest Metals’ (ASX:EMC) was higher after bulk sampling program at its Revere gold and base metal project in WA has revealed a high-grade gold saddle reef system similar to the Bendigo gold field.

Also ahead is Mighty Kingdom (ASX:MKL) has risen after the Friday launch of the free-to-play mobile game “POWER RANGERS: MIGHTY FORCE” (their emphasis) in collaboration with Canadian publisher East Side Games Group (TSX: EAGR) and Hasbro.

MKL says the game is now available for download worldwide through the App Store and Google Play Store.

ASX SMALL CAP LAGGARDS

Today’s best performing small cap stocks:

Swipe or scroll to reveal full table. Click headings to sort:

Code	Name	Price	% Change	Volume	Market Cap
ACW	Actinogen Medical	0.030	-61%	92,231,713	$206,084,631
JAV	Javelin Minerals Ltd	0.001	-50%	100,000	$8,553,692
RFA	Rare Foods Australia	0.017	-32%	171,845	$6,799,581
BXN	Bioxyne Ltd	0.005	-29%	4,281,845	$14,326,518
AUH	Austchina Holdings	0.003	-25%	50,000	$8,401,535
SHO	Sportshero Ltd	0.003	-25%	21,190	$2,471,331
VRC	Volt Resources Ltd	0.003	-25%	1,825,438	$16,634,713
BEL	Bentley Capital Ltd	0.013	-24%	238,856	$1,294,175
OLI	Oliver'S Real Food	0.013	-24%	50,500	$7,492,443
SGA	Sarytogan	0.123	-21%	3,241,174	$23,053,666
FL1	First Lithium Ltd	0.091	-21%	2,245,243	$9,160,164
BUY	Bounty Oil & Gas NL	0.004	-20%	4,252,205	$7,492,505
BM8	Battery Age Minerals	0.110	-19%	21,836	$12,558,259
PFT	Pure Foods Tas Ltd	0.025	-17%	137,711	$3,662,769
DMG	Dragon Mountain Gold	0.005	-17%	257,043	$2,368,030
HHR	Hartshead Resources	0.005	-17%	8,277,539	$16,852,093
IBG	Ironbark Zinc Ltd	0.003	-17%	136,216	$5,077,718
VIT	Vitura Health Ltd	0.073	-16%	4,628,045	$50,101,020
TRU	Truscreen	0.017	-15%	202,456	$11,051,822
CGR	Cgnresourceslimited	0.074	-15%	1,060,698	$7,897,703
BCT	Bluechiip Limited	0.003	-14%	7,910,346	$4,137,138
PAB	Patrys Limited	0.006	-14%	689,738	$14,402,131
BPH	BPH Energy Ltd	0.019	-14%	4,641,240	$25,246,060
EQR	Eq Resources Limited	0.038	-14%	2,032,203	$96,474,933

IN CASE YOU MISSED IT

American West Metals’ (ASX:AW1) metallurgical studies and test work on the Cyclone and Chinook copper deposits at its Storm project has generated up to 1.5% commercial copper feed grades and confirmed its direct shipping ore potential.

BPH Energy (ASX:BPH) is raising $1m through a placement to new sophisticated investors including high-net worth family offices and dedicated resource funds. Proceeds will be spent towards Cortical Dynamics and hydrocarbon exploration and development.

D3 Energy (ASX:D3E) is pushing ahead with its methane and helium testing program in South Africa after confirming that its new equipment had measured higher gas flow rates at its RBD03 hole along with world class helium compositions of 5.1%.

Impact Minerals (ASX:IPT) continues to progress its Lake Hope high purity alumina mine in WA towards production with the lodgement of the key mining lease over the West Lake resource. It continues to expect releasing the PFS in Q4 2024.

Neurotech (ASX:NTI) has unveiled its corporate strategy, focused on securing global partnering initiatives for NTI164 along with securing multiple registrations in Australia for the broad-spectrum cannabinoid drug.

Pan Asia Metals’ (ASX:PAM) field work has increased the anomalous zone at the KT East lithium prospect – part of the broader RK project in Thailand – by 2.8 times to 2.1km by 1km. Pegmatites suggest KT East prospect is likely amenable to open pit mining.

Sovereign Metals’ (ASX:SVM) infill drilling on the southern part of the Kasiya deposit is likely to upgrade part of the current resource for Stage 1 production from the indicated to higher confidence measured category. This area is proposed to provide ore feed in the first eight years of the project’s planned production.

St George Mining (ASX:SGQ) is progressing the acquisition of the world-class Araxá project in Brazil’s mining state of Minas Gerais that has historically defined high-grade niobium, rare earths and phosphate. It also corrected claims that there’s an active tailings dam within the project area.

Sunshine Metals (ASX:SHN) says its Lighthouse farm-in tenement within the broader Ravenswood Consolidated project in Queensland has the potential to host a large, shallow gold system. It is planning to extend exploration over three promising prospects.

At Stockhead, we tell it like it is. While American West Metals, BPH Energy, D3 Energy, Everest Metals, Impact Minerals, Neurotech, Pan Asia Metals, Sovereign Metals, St George Mining and Sunshine Metals are Stockhead advertisers, they did not sponsor this article.