Lunch Wrap: ASX pulls back sharply as profit taking hits resources

• Broad retreat from yesterday’s intraday high, down 0.59pc by lunch
• Gold still gaining but rare earths, lithium, uranium taking losses
• Consumer staples and utilities on the up as traders go on defensive

What started as a measured pullback this morning is threatening to accelerate into a bit of a rout on the ASX today.

Down just 0.28% in the first hour, the ASX200 had fallen 0.59% to 9014 by lunchtime as profit taking intensified.

High-flying rare earths, lithium, uranium and even some copper stocks are taking a beating.

Recent favourites like Bougainville Copper (ASX:BOC) are down 20% today, after rising more than 400% in six months.

Iluka Resources (ASX:ILU) is down 8.6%, Bannerman Energy (ASX:BMN) 11% and gold stock St George Mining (ASX:SGQ) has fallen 10.35% intraday.

Only the traditionally defensive sectors of consumer staples and utilities are going anywhere.

The market’s jitters are coming mostly from a worsening of economic indicators over the pond.

US markets fell across the board overnight.

Regional bank shares tumbled after two lenders flagged issues with borrowers, stoking nerves about the health of the credit market.

With the US government shutdown entering its 17th day – and threatening to wipe out US$15 billion in economic output for every week it continues – Aussie traders are finally being forced to take note.

Gold smashed through another record overnight, a clear indicator fear is still a driving market force, although it’s pulled back from highs around US$4391 per ounce at present.

With trade tensions between the US and China grinding gears and oil prices plummeting, it’s beginning to feel a bit like the early days of Covid.

Still, with the market bouncing off lows at around 9002 points, it’s looking like we might keep much of the gains made over the last few days.

ASX LEADERS

Today’s best performing stocks (including small caps) intraday:

 In the news…

Hawk Resources (ASX:HWK) is locked-in to earn up to 80% in the Olympus scandium project in WA, supported by a $5 million placement that enjoyed strong support.

Management says the acquisition ties in with the company’s long-term goals, wherein HWK will focus on producing copper in the near-term before transitioning to critical minerals moving forward.

Etherstack (ASX:ESK) subsidiary Etherstack Wireless has secured a five-year, £14.2m contract with the UK Home Office to supply critical communications software for use in the UK’s Emergency Services Network.

ESK will deploy its 3GPP LMR-IWF (InterWorking Function) into the UK government network to allow public safety agencies to communicate from their existing TETRA digital radio network.

Metgasco (ASX:MEL) has fielded interim results from a phase 2 production uplift program at the Southern Flank gas fields.

MEL was unable to initiate flow at the Vali-1 Toolachee well, but the Vali-2 Toolachee flow is indicating a variable gas rate of 0.25MMscfd at 300-350 psi FWHP and water rate of 30-40 bwpd. The company will begin work at Vali-3 in November.

Parkway Corporate (ASX:PWN) subsidiary Queensland Brine Solutions (QBS) has inked a binding option to lease a 10-hectare site to develop the QBS Brine Management Complex.

PWN intends to provide a solution for the large-scale and long-term waste brine management related challenges associated with coal seam gas (CSG) production in Queensland.

ASX LAGGARDS

Today’s worst performing stocks (including small caps) intraday:

In Case You Missed it

Locksley Resources (ASX:LKY) says research into antimony extraction with Rice University is progressing well and could result in a pilot plant.

Weebit Nano (ASX:WBT) CEO Coby Hanoch called for greater investment in Australia’s semiconductor sector, saying we’re not making the most of our natural advantages.

Latrobe Magnesium (ASX:LMG) has secured $10m to complete a demonstration plant that converts brown coal waste into magnesium oxide using world-first technology.

Perpetual Resources (ASX:PEC) has entered the next phase of exploration at its Igrejinha and Renaldinho lithium pegmatite projects in Brazil.

Aldoro Resources (ASX:ARN) has started phase 2 diamond drilling targeting deeper, high-grade niobium zones at Kameelburg in Namibia.

Last Orders

Ballard Mining (ASX:BM1) is advancing several development work streams at the Mt Ida project, including a licence to install a new 2.5 GL/yr bore field and access road.

BM1 has also purchased on finalised agreements with land holders for the bore field, which will provide an additional 15km of strike along the Ballard fault zone.

The company also submitted two new mining lease applications to future proof the Bombay and West Knell gold deposits.

Axel REE (ASX:AXL) has secured an extra 867 hectares over three licences adjacent to its mineral resource at the Caladao project in the Lithium Valley of Brazil.

AXL says the tenure expansion strengthens the size and scale potential of the project, as it moves to become a major rare earths and gallium explorer in Brazil.

At Stockhead, we tell it like it is. While Ballard Mining and Axel REE are Stockhead advertisers, they did not sponsor this article.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.