• Both the ASX 200 and small cap index were in the green today
  • A massive 11 out 11 sectors finished higher let by Utilities
  • Westpac says rising interest rates and cost of living will hit consumers and businesses after Xmas

 

The ASX 200 was up Wednesday, gaining 0.67% on lower than normal volume and the ASX XEC was up 1.35%.

An epic 11 out of 11 sectors were higher, led by Utilities which rallied by 2.09% with Origin Energy (ASX:ORG) among the leaders, up 2.88%.

The lowest gainer (is that a phrase? It is now) was the financial sector, up a measly 0.10%.

Big bank Westpac (ASX:WBC) was in the red today, down 0.38% after its AGM where, to the general relief of its execs, it didn’t get a second strike. 

Last year more than one third of investors voted against the company’s executive pay plans, (a first strike) because of the bank’s sliding share price and lending to the resources industry.

CEO Peter King said the company has refreshed its climate change action plan and joined the Net-Zero Banking Alliance “which continues to align with our operations and lending portfolio with net-zero by 2050.

And it’s no surprise there’s a big focus on rising interest rates.

“There is no doubt that tighter monetary policy and slowing economic growth will impact some customers in the year ahead,” King said.

“We expect the combination of rising interest rates and the increase in cost of living to be felt more fully by customers and business after Christmas.”

 

NOT THE ASX

Markets in Europe rose yesterday as investors reacted to data that showed US inflation easing more than expected in November. 

US inflation eased to an annual rate of 7.1% in November from 7.7% in October, below forecasts of 7.3% in a WSJ survey of analysts. 

That “offered a boost to those who think that the Federal Reserve may not have to go as hard, or as far on rate hikes as we head into 2023,” CMC Markets analyst Michael Hewson wrote. 

The Fed’s next interest rate decision is tomorrow, with a half-percentage-point increase widely expected.

“The Fed is still going to focus on the labor market imbalance, a dovish pivot is still a long ways off, and in the meantime companies and consumers have to recalibrate to the impact of higher interest rates and a slowing economy,” wrote BMO Wealth Management chief investment strategist Yung-Yu Ma in a note.

Markets will remain “choppy” in the near term, but an improving inflation backdrop creates a positive bias, Ma added.

 

ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks:

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The biggest winner was Pursuit Minerals (ASX:PUR) following an agreement to acquire Argentina-focused lithium company, Trilogy Minerals.

Trilogy holds the rights to acquire over 9,233ha at the Rio Grande Sur Project, which hosts an inferred resource of 2.1Mt LCE at an average grade of 370mg/Li to a depth of 100m.

It is currently in the process of undertaking a capital raising through the issue of convertible notes to raise $8m which will complete prior to the end of December 2022.

Funds raised through the Trilogy Class B Notes will be used to exercise options over tenements 1, 2 3 and 4 and these tenements will be owned prior to settlement of the acquisition with Pursuit.

Pursuit managing director Bob Affleck says the acquisition creates a clear de-risked pathway to potential project development.

“The acquisition of Trilogy will see Pursuit expand its operations to become an emerging lithium exploration company with resources in a highly prospective lithium-rich region,” he said. 

“With lithium prices in excess of $85,000 a tonne, Pursuit is well placed to take advantage of one of the world’s most sought-after battery minerals.” 

 

ASX SMALL CAP LAGGARDS

Here are the worst performing ASX small cap stocks:

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TRADING HALTS

RMA Global (ASX:RMY) – Capital Raise.

Global Lithium Resources (ASX:GL1) – Resource update for the Manna and Marble Bar Lithium Projects.

Strike Resources (ASX:SRK) – Capital Raise.

Caprice Resources (ASX:CRS) – Acquisition and Capital Raise.

Nex Metals Exploration (ASX:NME) – Pending announcement with respect to review of responses by Nex to the ASX.

Intra Energy Corporation (ASX:IEC) – Capital Raise.

 

 

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