• ASX slumped on Friday, taking cues from Wall Street
  • This is despite iron ore and lithium miners climbing higher
  • Beijing’s officials will meet today to discuss how to support China’s ailing property market

 

Gains in lithium and iron ore miners weren’t enough to stop the ASX slipping lower on Friday. 

At the close, the benchmark ASX 200 index was down -0.75%, but for the week the index was up almost 1%.

Xero (ASX:XRO) dragged down the Tech sector — which is the worst performer today — down by more than -4% on no news.

The iron ore price climbed in Singapore on the hope that Beijing’s key officials, who are expected to huddle today, might step in with some policy support to help buy up unsold homes from struggling builders. 

China has in recent times been experimenting with a few tricks to get rid of extra houses, tossing in some state cash for good measure, but this one is expected to be much larger in scale.

“The plan can inject liquidity to developers directly and improve their financial situation, as well as immediately digesting excess inventory,” Raymond Cheng over at CGS International told Bloomberg. 

Larger capped lithium miners also climbed today, with Pilbara Minerals (ASX:PLS) adding 2% and Mineral Resources +0.5%.  

But gold miners were mostly lower on profit taking, with Evolution Mining (ASX:EVN) down -1.5%, and Gold Road (ASX:GOR) down -2%. 

Also at the fat end of town, regional lender Bendigo Bank (ASX:BEN) rose +7% today despite reporting a 2.3% dip in its cash profit for the 10 months up to April 30, coming in at $464 million. 

The Star Entertainment Group (ASX:SGR) meanwhile was down -1.5% despite revealing that the date when The Star Gold Coast and Treasury Brisbane casinos’ licenses will get suspended are being postponed.

Instead of May 31, the two venues will now be going down on December 20. The change gives the Queensland Government time to look into what came out of the Second Bell Inquiry into the Sydney’s venue, and see how Star is fixing things up over there.

Close to the end of Friday’s session, this is what the ASX looked like:

 

Source: MarketIndex

 

What else is happening?

Across Asia today, stock markets mainly dropped as new data from China showed the economy isn’t doing so great, and traders were rethinking what’s next for US interest rates after hawkish remarks from Fed officials last night.

Data released today shows that China’s retail sales went up at the slowest rate since 2022, but industrial production sped up. This shows that the world’s second-biggest economy’s recovery is a bit uneven.

However, Matt Maley at Miller Tabak + Co said: “….the bulls are still fully in charge right now, and so it will take a significant reversal to stem the tide of the upside momentum.”

Looking ahead to tonight, the EU will release its final April CPI inflation reading.

 

ASX SMALL CAP LEADERS

Today’s best performing small cap stocks:

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Power Minerals (ASX:PNN) has announced it’s secured a handful of Singaporean and Chinese partners to develop its Rincon lithium project, which is part of the wider Salta operation. On establishment of the Rincon JV, PNN will hold a 41% interest and Chinese entity Li Energy Technology will hold a 59% interest. It’s a “transformational agreement”, says Power, and is designed to deliver significant production at Rincon with the aim of making it a big operator in the field of Direct Lithium Extraction (DLE).

Poseidon Nickel (ASX:POS) says that its exploration, in hiatus for four months while a now-terminated sales process was taking place, has now kicked off again, with POS unearthing a bunch of greenfields targets to test with the drill bit. As Reubs noted earlier, “the recovering nickel price is also helping”. Re the lithium angle, though, numerous pegmatites have been identified at the company’s Lake Johnston project and rock chip samples have been collected from within and near a broad >100ppm Li2O anomaly reported by the company in January. Soil sampling planning to extend and infill the anomaly is now underway.

One of yesterday’s heroes, Helix Resources (ASX:HLX) was still up a goodly amount today. This morning, the Cobar-region copper player announced some funding news, revealing that a ‘rights issue’ undertaken to to raise $2.3 million has now closed “heavily oversubscribed”. The company notes there was strong support from shareholders and new investors introduced by Mahe Capital, and that an additional $0.5 million has been accepted to accommodate “some of the excess demands”. The funds will be put towards a drill campaign currently underway to initially test the highest priority geophysics anomaly at the Canbelego copper project near Cobar in central NSW.

Killi Resources (ASX:KLI) hit the news this week, with share price up accordingly, thanks to the company signing an earn-in joint venture (JV) agreement with a fully owned subsidiary unit of the Johannesburg-headquartered Gold Fields – one of the world’s largest gold mining firms. This deal could see Gold Fields investing up to A$13m to acquire as much as an 85% interest in Killi’s West Tanami project. Kill says the agreement validates its work to date and its belief that the West Tanami project has the potential to host a large new scale orogenic gold deposit.

Electricity provider Locality Planning Energy (ASX:LPE) was up after announcing updated guidance to the ASX, telling investors that the company is now expecting a significant improvement in net profit to the range of $1.95m to $2.0m, and offereds EBITDA guidance between $3.3 million and $3.5 million, which is loads better than the company’s net loss of $12 million for FY23.

Education company NextEd (ASX:NXD) said total new international student (ELICOS and vocational) enrolments grew by 11% in the March quarter against the previous quarter, despite tighter immigration policy. NextEd’s cost base has reduced with targeted annualised savings of approximately $5 million from early FY25.

And… AIC Mines (ASX:A1M) announced that the mining lease for the Jericho Copper Mine has been approved by the Queensland Government, Department of Resources. Jericho mining optimisation studies to reduce initial schedule risk and also longer-term operational risks are currently being finalised. The major component of this work is investigation of direct underground access to Jericho from the Eloise portal via a 3.6 kilometre link drive.

 

ASX SMALL CAP LAGGARDS

Today’s best performing small cap stocks:

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IN CASE YOU MISSED IT

Peregrine Gold (ASX:PGD) is preparing to start follow-up drilling aimed at extending gold mineralisation at the Tin Can discovery within its Newman project in WA’s Pilbara region following the mobilisation of the drill rig to site.

PharmAust (ASX:PAA) has been granted orphan drug designation (ODD) by the US Food and Drug Administration (FDA) for its drug monepantel (MPL) aimed at treating motor neurone disease (MND), also known as amyotrophic lateral sclerosis (ALS).

RLF AgTech (ASX:RLF) has completed the acquisition of LiquaForce for $3m in cash, $0.75m in RLF shares as well as another $0.75m in cash that is payable on or before 30 September 2024. The acquisition of the liquid fertiliser manufacturing, sale and application business will deliver increased Australian revenues and market growth opportunities in Queensland.

Blue Star Helium (ASX:BNL) has spudded the State 16 SWSE 3054 helium development well at its Galactica project in Las Animas County, Colorado. The well is expected to take 5-7 days to reach the projected total depth, following which the company will carry out wireline logging and testing of the target Lyons reservoir. Galactica is part of the broader Galactica/Pegasus development where four exploration wells have already proven its helium credentials after returning strong helium concentrations of 2-6.1% along with gas flow rates of between 125,000 and 412,000 cubic feet per day.

Impact Minerals (ASX:IPT) is now funded to complete the pre-feasibility study for its Lake Hope high purity alumina project on the border of WA’s Goldfields and Wheatbelt regions after raising $3m through a strategic placement. The placement of 150 million shares priced at 2c each was made to sophisticated investors and includes the issue of one free attaching option exercisable at 2.7c and expiring 15 months from the date of issue for every three shares subscribed for. “We are now very well-funded to complete the pre-feasibility study on our unique Lake Hope high purity alumina project located here in Western Australia by the end of this year,” managing director Mike Jones said.

 

TRADING HALTS

EQ Resources (ASX:EQR)pending the release of information in relation to a material capital raising.

Victory Metals (ASX:VTM) –  pending an announcement regarding a private placement.

Eastern Metals (ASX:EMS) – pending  an announcement to the market in relation to a capital raising.

 

At Stockhead, we tell it like it is. While Peregrine Gold, PharmAust, RLF AgTech, Blue Star Helium and Impact Minerals are Stockhead advertisers, they did not sponsor this article.