• ASX closes 0.80pc lower on Monday
  • Broad-based losses led by healthcare, consumer and resource stocks
  • Top small cap performers include Encounter and Burley

 

The ASX has given back almost every last cent from Friday’s unexpected booty. I blame the weakness of the human heart and local mining and energy companies, which again failed to turn up.

The S&P/ASX200 closed Monday down 62.30 points or 0.80% to 7,733.70.

 

Via ASX

Worst of the worst today: the unfairly out of favour big healthcare cap ResMed (ASX:RMD) and the uranium digger Deep Yellow (ASX:DYL), which has also had to give back all it’s P. Dutton dollars after everyone, including the CSIRO, said he was fibbing about an Aussie nuclear future.

Resmed shares have lost 13.1% and DYL is down 5.8%.

According to the ASX, over the last five days the index is virtually unchanged, but is currently 2.24% below its 52-week high.

That’s in no small part due to another frustrating no show from ASX mining stocks.

The iron ore heavyweights are in my bad book.

Honestly, watching them trade lately is like watching State of Origin, where the big boppers are sitting on the pine, playing footsies when their state needs them most.

Commodity prices have been struggling and Singapore iron ore futures traded lower 1.3% to $US103.70 a tonne on the July contract.

The iron triumvirate – BHP (ASX:BHP) , Rio Tinto (ASX:RIO) and Fortescue (ASX:FMG) were all AWOL.

Actually, Fortescue (ASX:FMG) is still here, but an unworthy contestant of late – as the house built on twigs continues its unhappy run.

Twiggy stock – terrible but not alone  (1 Month):

Via Google

Woodside Energy Group (ASX:WDS) was also a most ordinary option on Monday.

Elsewhere among the dirt, the gold price is bopping between a tight range, after gold copped its largest selloff in three-and-a-half years on Friday, dropping 3.5% to US$2,290.

That was on reports suggesting that the gold-ravenous People’s Bank of China (China’s central bank) already halted them gold purchases back in May.

For now, though, if the spot was a sport, think ping pong and right now it looks comfy around around $2,323, after giving up around 1% during the US session on Friday.

 

Via Trading Economics

 

At home that meant profit taking – which was most evident at Evolution Mining (ASX:EVN) which fell heavily early on Monday.

EVN was far from alone, too.

Most of the overweight big cap ASX goldies slid hard and fast today (see below).

Via MarketIndex

 

The excitement in energy names is almost contained to nuclear-leaning stocks like uranium house Paladin Energy (ASX:PDN) which has halted this morning ahead of news of likely M&A.

Tech stocks were the best of a bad Monday bunch, led by majors WiseTech Global (ASX:WTC) up 1.8%  and NextDC (ASX:NXT).

Healthcare was heavily weighed down by the heavily weighted that stride amid them.

Cochlear (ASX:COH) dropped 1.2% and CSL (ASX:CSL) slipped 0.5%.

But there was a lot of ordinary to be had during a szession taken up largely with what might happen elsewhere.

Namely, when the boffins at the Australian Bureau of Statistics on Wednesday drop the consumer price index (CPI) indicator for May.

A great many Aussie Economists are expecting the CPI to increase to 3.8%, from 3.6% in April. My experience is that almost guarantees it won’t happen.

The headline effort’s been from widely owned sleep apnoea device maker, ResMed (ASX:RMD), which was scuttled some 12% after anti-fat pharma Eli Lilly shared US Food and Drug Administration on a potential label expansion for its weight loss therapy tirzepatide against obstructive sleep apnoea was expected later this year.

Long and short is we’ve covered this ground before with RMD, but it looks like the doubt is hard to shake.

Everyone has a piece of medical device maker for the treatment of sleep apnea, which has made the healthcare giant ResMed’s significant losses a significant weight on Monday business.

ResMed’s sleep apnea market has been in doubt ever since the Novo Nordisk and Eli Lilly’s of this world started brandishing weight loss drugs which also claim to do good things to snorers. But eventually those fears ebbed.

Over the weekend, however, reports suggest an Eli Lilly trial result has the potential to shrink RMD’s target market.

Pharma giant Eli Lilly published results on Friday (US time), outlining positive results from its tirzepatide drug, which reduced obstructive sleep apnea in some participants.

Also among the many larger cap losers to start the week, Star Entertainment shares dropped more than 6% after the woefully put-upon casino runner ran into a profit warning, while another executive – this time ex chairman and  interim CEO David Foster officially left the building.

 

ASX Sectors on Monday

Via ASX

 

 

The UNASX

On Wall Street, tech stocks weighed as fears AI stocks might be a good profit have started to itch certain palms.

The Dow edged higher, helped by a climb in McDonald’s shares. For the week the Dow was up 1.4%, the S&P rose 0.6%, while the Nasdaq was flat.

Chip champ Nvidia (NVDA) was among the biggest problems for Wall Street on Friday, and its issues brought down fellow semiconductor stocks Qualcomm, Broadcom and Micron Technology.

Business activity in the states jumped to a two-year high last month as jobs rebounded and price pressures eased in a sign of cooling inflation.

US PMI’s rose more than expected and are solidly in expansionary territory. However, retail sales barely rose in May after falling the previous month and housing starts extended their decline, hitting the lowest level in nearly four years.

 

US Futures on Monday arvo in Sydney

Via Fox

 

Closer to home, regional stocks sank. The South Korean won is winning. In Japan the yen is higher.

Indian indces started the week lower. The Nifty 50 slipped below 23,500 in morning trade on Monday, down for the second session in a row rattled by weakness from metals, property and finance stocks.

In another world (sometimes) the Shanghai Composite really stumbled on Monday as did the tech leaning Shenzhen Component both down around 1.25%.

Mainland indices are nearing 16-week lows as investors continued to pull capital out of China as the lack of forceful policy support measures continues to dampen sentiment and roll eyes.

The new FDI data released over the weekend shows foreign money pouring out of Chinese stocks this month at a rate if RMB 33 billion yuan via the Stock Connect Scheme with Hong Kong.

 

ASX SMALL CAP LEADERS

Today’s best performing small cap stocks:

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Niobium has had a close encounter with Encounter Resources (ASX:ENR).

ENR says it has drilled itse;lf right into some yummy thick, high-grade A1 niobium at the (not Simon) Crean carbonatite thingy which is a part of the Aileron project in the sexy West Arunta region of West Grunter (Australia).

Highlights include 52m @ 3% Nb2O5 from 81m to end of hole,  including 16m @ 6% Nb2O5.

Here’s some quality rockspeak:

Via ASX

 

ENR MD and noted space explorer Will Robinson said:

“Aircore drilling is opening up new fronts of shallow niobium-REE carbonatite hosted mineralisation at Aileron. The aircore rig completed over 10,000m of drilling in its first month on site. This drilling has expanded the near surface footprint of the Crean, Hurley and Emily carbonatites.

The aircore rig has now moved to the untested Green and Joyce targets located east of WA1 Resources’ Luni carbonatite discovery. Drilling will start with broad spaced aircore traverses and then move to closer spaced drilling based on initial observations. Aircore drilling is proving to be a fast, low impact and cost-efficient.”

The iron ore and lithium explorer Burley Minerals (ASX:BUR) has jumped on news veteran cap markets exeuctive Dan Bahen is joining the BUR Board as non-executive chairman.

Dan has a bunch of experience – over 23 years of capital markets, commercial and finance – including 22 years with Paterson Securities and then Canaccord Genuity.

The company says Bahen has been an investor in Burley since the IPO and holds a 5.1% relevant interest in the company.

And Reward Minerals (ASX:RWD) says that the International Preliminary Examining Authority (IPEA) has provided a positive Preliminary Report on the “Patentability” of its processing technology (Reward Process) for recovery of PotassiumSulphate (K2SO4 or SOP) directly from concentrated seawater and other high-sulphate brines.

RWD says the IPEA found that claims 1-17 meet the requirements for novelty under Patent Cooperation Treaty (PCT) .

Reward CEO Lorry Hughes calls it another key step toward transforming the SOP industry via commercialisation of Reward’s processing technology.

“The technology is relatively simple, it negates the need for the removal of waste salts by expensive mechanical harvesting and it does not require complicated and expensive flotation processing steps to separate waste salts from SOP.

“All this points toward a significant reduction in production costs compared to existing operations and methods. Importantly there appears potential for the first time globally, to produce SOP from waste brines or bitterns from solar salt operations using seawater as feed brine on a commercial basis. This could allow operations in coastal areas with established transport infrastructure to produce and ship SOP to market at competitive prices.

“By targeting cheaper costs of production as outlined in the Company’s engineering study completed in September 2023 there should be opportunities to also grow the SOP market globally as it is a highly sought after fertiliser in short supply.”

 

Equity Story Group (ASX:EQS) says it’s making a divestment of  Bluetree Equity  which trades as a “A Rich Life”  from Eamong the stable of EQS assets.

The stock has jumped in response, although I reckon Claude Walker’s A Rich Life – bought by EQS back in 2022 under the direction of the previous CEO and Chairman, is still a cracking concept.

Walker was also employed by EQS.

“The current board believes “A Rich Life” to be a noncore asset and not a fit for the future direction of the group.Equity Story has sold 100% of the issued shares in Bluetree Equity Pty Ltd to Blueberry and Walker Family Pty Ltd as trustee for the Blue Trust for $80,000, Claude Walker’s employment agreement with the Company has been dissolved and the Company has been released from any obligation to pay any remuneration or accrued leave under the employment agreement with Claude Walker.”

Equity Story also says it has also been released from its obligation to pay the remaining $100,000 cash under the purchase agreement that was due on 1 July 2024.

The EQS Board – having saved $100k – the board does not believe the divestment will have any material impact to the group’s earnings.

 

Finally, hats off to Myer (ASX:MYR) which is up about 17% to end a fine Monday for Myer.

Myer (ASX:MYR)  approached the S. Lew connected Premier Investments (ASX:PMV) to explore a potential combination with its apparel brands business “to create one of the leading retail and apparel companies across Australia and New Zealand”.

It’s apparently the brainchild of new Myer boss Olivia Wirth.

The Australian reports that Wirth  reckons the best defence is attack .

“Wirth didn’t waste any time as she launched an audacious plan that both tackles the retailer’s longer term challenges and finally delivers the department store to billionaire shareholder Solomon Lew.

“Wirth’s radical bid to merge Myer into Lew’s much larger cashflow machine – the yet-to-be demerged retail business that houses brands like Just Jeans, Dotti and Jacqui E – represents the biggest strategic play since the department store attempted to merge with rival David Jones a decade ago.”

The deal, which effectively marks a reverse takeover of Myer, also marks the ultimate prize for Lew after years of stalking, agitating and slowing raising the pressure.

Myer shares surged on the news it was exploring a merger with Apparel Brands – which boasts retail brands like Portmans, Dotti, Just Jeans and Jay Jays.

 

ASX SMALL CAP LAGGARDS

Today’s best performing small cap stocks:

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TRADING HALTS

Paladin Energy (ASX:PDN)pending an announcement by the Company relating to a capital raising.

 

 

IN CASE YOU MISSED IT

Anson Resources (ASX:ASN) is working with Koch Technology Solutions to test a Li-Pro process pilot unit for direct lithium extraction at its Green River project in Utah.

Conrad Asia Energy (ASX:CRD) is closing in on developing its Mako gas field in the West Natuna Sea offshore Indonesia after signing a binding domestic gas sales agreement with PT Perusahaan Gas Negara.

Indiana Resources’ (ASX:IDA) five-hole drill program targeting gold and REE mineralisation is underway at the Minos prospect within its Central Gawler Craton exploration project in South Australia.

Software as a service player Intellicare (ASX:ICR) has raised $2m to commercialise its established tech development pipeline.

Legacy Minerals (ASX:LGM) has secured a 5,500km2 exploration opportunity through its acquisition of the Thomson project in New South Wales, which hosts numerous undercover targets defined by discrete, “bullseye” magnetic and gravity anomalies with similar character to Tier-1 deposits.

Mt Malcolm Mines (ASX:M2M) has started bulk sampling and an ore processing study at the high-grade Golden Crown gold prospect in WA after completing a 18-hole reverse circulation drill program.

Renascor Resources (ASX:RNU) has selected two of Australia’s biggest engineering firms – GR Engineering and Primero Group – to compete for the right to develop the landmark Siviour graphite plant in South Australia.

Strickland Metals’ (ASX:STK) drilling has returned more strong assays from three targets at its Yandal gold project with the Palomino target now striking over 600m with assays pending.

Summit Minerals (ASX:SUM) is reporting grades up to 53% niobium from rock chip sampling at its recently acquired Equador niobium-tantalum-rare earths project in Brazil.

At Stockhead, we tell it like it is. While Anson Resources, Conrad Asia Energy, Intellicare Legacy Minerals, Mt Malcolm Mines, Renascor Resources, Strickland Metals and Summit Minerals are Stockhead advertisers, they did not sponsor this article.