Closing Bell: The ASX needs to eat more greens as it groans beneath the dead weight of Materials

• ASX 200 went for a somersault dismount but couldn’t stick the landing
• Materials dragged on the overall market, big miners taking solid hits
• The Hot Chip Index set to surge as Tassie farmers go ham on spud prices

After a less-than-pleasant start to the morning, Australian markets staged a post-lunch recovery, with bellies full of refreshment and one eye on the weekend. Disappointingly, the wheels came off around 3:00pm and the last hour was eminently forgettable.

As Friday wore to a -0.25% close, the benchmark needle’s was wobbling like the tail end of an earthquake on one of those machines whose name I can’t remember. I want to say  Sphygmomanometer?

(Google says Seismograph. My Editor says I’m an idiot. Both are likely correct.)

Materials was the villainous sector today, with a moustache-twirling, cape-swishing (-1.94%) pantomime performance, with InfoTech (-1.47%) and Utilities (-1.13%) chiming in late in the day.

Financials (+0.72%), Health (+0.49%) and Real Estate  (+0.33%) did what they could, but their best wasn’t best enough to keep things positive across a bumpy market ride.

In arguably the single most important piece of broader local economic news, there are worrying signs for consumers of deep fried starchy tuber shards, with Tasmanian farmers plucking up the courage to tell frozen chip giants that they had no choice but to stump up more dollars for raw spuds.

As it stands, one farmers’ group has landed a sizable increase to cover rapidly rising costs, with reports of an average rise of $109/t on last year, with some farmers looking to bring in up to $275/t for specific size and varieties.

Farmers in Tassie have been doing it tough through long-running weather issues, and welcome the price rise, but it will absolutely be passed on to consumers over the coming months, leading to a tightening of belts in many households for more reasons than one and a searing decline in seagull numbers.

 

WHAT HAPPENED OVERSEAS?

In Asian markets today, it was an omni-directional slugfest, with Hong Kong putting on a punch-drunk pick-up through the afternoon session, but still heading for a loss around -0.60%.

The Nikkei looked like it was working really hard, but is tracking to break even with less of a Naruto Run and more of an Akira Slide for the end of the week.

Meanwhile, Shanghai continued to gobble the sweet, honey-slathered rewards of success, bucking the regional trend to close out the day higher, around +0.28%.

In commodities news, Russia’s oil industry is still reeling from the death of Ravil Maganov, chairman of the Russian oil giant Lukoil, who died an almost-cartoonishly Russian death recently, “falling out of a window” while in hospital.

Maganov is now the 8th Russian oil magnate to die under circumstances that are obviously more mysterious than a 48-hour Scooby Do marathon, despite Lukoil optimistically releasing a statement that Maganov passed away after battling a serious illness in the hope that someone might be dumb enough to believe it.

No word on whether the World Health Organisation is ready to list “Being a Russian Oil Magnate” as a fatal, non communicable disease, but the evidence is clearly mounting, so we’re expecting an announcement from WHO soon.

Oil prices are up +2.0%. Make of that what you will.

 

ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks:

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As is traditional on Australian markets, some people did well, and others did not.

Those that are smiling today include almost-worth-$1b Life360 (ASX:360), up +7.0% for the day despite nothing to report to the ASX, and no visible reason why Australian families would suddenly be needing to track the every movement of their children.

Among the hard hits in the Materials sag that took place today were some big names, with  headliners BHP (ASX:BHP), Rio Tinto (ASX:RIO) and Fortescue (ASX:FMG) adding serious weight to the anchor, down -2.1%, -2.6% and  -2.6% respectively.

It was a better day to be a smaller miner though, with NickelX (ASX:NKL) adding more than 17.0%, while early bruiser Norwest (ASX:NWM) peaking at a 31% jump in early trade before softening like a chocolate in the sun, up around 5.0% when the bell rang.

There was a late charge into the winner’s circle from tech boffins Felix Group (ASX:FLX), climbing to a solid 33% gain on yesterday’s news of a 3-year contract extension with CIMIC, one of Australia’s largest construction companies.

Not having a Fab Friday, however, was Advanced Human Imaging (ASX:AHI), after the  acquisition rumours that sent its price smashing through the roof by 48% on Tuesday turned out to be an an all-share acquisition of wellteq Digital Health – a move that seems to have disappointed the market, sending AHI back from whence it came, down -27% for the day.

 

ASX SMALL CAP LAGGARDS

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WHAT YOU MAY’VE MISSED

It’s been a big day in the Stockhead newsroom and we’ve covered the big news today, but in case you missed it, there’s been a nonchalant whistling performance from a few companies in relation to ASX speeding tickets today.

Vanadium Resources (ASX:VR8) offered something in the way of explanation for a volume surge and price rush that saw it move from $0.073 to a high of $0.087 before being tapped on the shoulder.

VT8 pointed to recent announcements and it’s upcoming DFS due to be released this month as possible reasons, but nothing concrete or nefarious.

Likewise, Parabellum Resources (ASX:PBL) got a “please explain” from the ASX today, noting its price movement from a low of $0.255 on 31 August to a high of $0.42 today.

PBL said “nothing to see here”, but noted that it recently entered into an agreement to

subscribe for 30% of the fully diluted issued capital in Temarise Limited (UK) for A$3.9m which holds the exclusive option to acquire 80% of the Khotgor Project, Mongolia.

And Advanced Human Imaging Ltd (ASX:AHI) replied to the ASX about it’s monumental out-of-the-blue leap from $0.125 at the close of trade on 29 August to an intraday high of $0.245 on 1 September, maintaining that confidentiality had been maintained prior to its welltec acquisition announcement this morning.

It was something of a moot point by the time the agreement arrived, as AHI had shed a chunk of its gains by the time the ASX fax machine finished chirping, as the news was deemed highly uncool by investors today.

 

TRADING HALTS

Errawarra Resources (ASX:ERW) – There’s news of its tenement grant progress on the way over its Andover West project.

Great Boulder Resources (ASX:GBR) – GBR’s been out doing some drilling, and they’d like everyone’s attention to announce the results.

Victory Goldfields (ASX:1VG) –  Victory’s got results on the way as well, which we suspect will come in early next week.

 

And we’ll end the week with a limerick:

An Exec in a deep, dark malaise,

Needed cash for his Lithium plays.

Said the boss: “don’t you frown”

“There is money around”

“We’re announcing a Capital Raise!”.

And that’s exactly what Wia Gold (ASX:WIA), White Cliff Minerals (ASX:WCN), East 33 (ASX:E33) and Benz Mining (ASX:BNZ) have done, all in halts ahead of a capital raise. Huzzah!