Market Highlights and 5 ASX Small Caps to watch on Wednesday

World stock markets continue to rebound strongly

US and European stocks markets surged overnight as investors gained confidence that Omicron would not derail the global economy.

All three major US equity benchmarks lifted – the S&P 500 by 2.07%, the Dow Jones by 1.4%, and tech heavy Nasdaq by 3.03%.

Tech stocks rose even as Treasuries fell, sending two-year yields to the highest since March 2020.

Over in Europe, the Stoxx 600 closed 2.4% higher, while London’s FTSE gained 1.5%.

Investors were also buoyed after China moved to ease its banks’ reserve requirement ratio by 0.5%, effectively telling them to lend out more money.

In other markets, iron ore price surged 8% overnight after data showed that China’s iron ore imports rose 14.6% in November, the highest in 16 months.

Oil prices also rallied for a second consecutive day, as traders became optimistic that new travel lockdowns would be avoided.

All eyes will now turn to Friday’s US CPI release. Commsec predicts that US core inflation is expected to increase by another 0.5% from the 4.6% we saw last month.

Meanwhile, Bitcoin is trading higher at US$50,800 at 8am AEDT, from the US$49,100 yesterday.

Ethereum (ETH) is faring even better, up about 7% and moving back above US$4,400 again, about $400 below its all-time high.

Read our crypto roundup here on Coinhead.

ASX 200 to open higher on Wednesday

The ASX 200 looks set to rise at the open this morning, with futures markets (December contracts) pointing up by 0.30% at 8:30am AEDT.

Yesterday, the local index finished 0.67% higher, marking the best performance by the Australian bourse since early October.

Almost all sectors finished higher with energy and tech – two sectors under siege in recent weeks – recording gains of 2.07% and 1.9% respectively.

The Reserve Bank announced after its meeting yesterday that it would “be patient” and keep its cash rates at record lows of 0.1%.

And later today, the ABS will release the skilled job vacancies data for November.

5 ASX small caps to watch today

Carnegie Clean Energy (ASX:CCE)
CCE’s wholly owned subsidiary, CETO Wave Energy Ireland, has been selected to receive a contract under the EuropeWave PCP programme. The company will be paid €291k (A$463k) to deliver required Phase 1 activities, including undertaking tank testing for wave energy converter systems. Phase 1 will commence in January 2022 and run for 7 months.

Playside Studios (ASX:PLY)
Games company PlaySide has signed a deal with Shiba Inu Games, a derivative entity formed from the globally recognised Ethereum-based token and decentralised cryptocurrency Shiba Inu ($SHIB). This is a fixed-price development agreement and does not include a revenue share. Playside will be paid in USD and not cryptos.

Strike Energy (ASX:STX)
Based on the strong results at Walyering-5 to date and subject to a successful production test in Q1/22, Strike is targeting to move the field back into production as quickly as possible. Walyering presents a low capex and fast development opportunity for Strike to monetise the asset .

Hexagon Energy (ASX:HXG)
HXG has signed a binding 75% earn-in and option agreement with South Star Battery Metals over its Ceylon Graphite Project in Alabama. Amongst others, the 3-year deal gives a right for South Star to acquire an undivided 75% in the project, in return for chipping in C$750,000 on expenditures.

Krakatoa Resources (ASX:KTA)
The company announced the discovery of ionic type rare earth elements at its Rand project in NSW. Significant REE intersections discovered over re-assayed samples include: 11m @ 1,223 ppm TREO from 43m.

At Stockhead we tell it like it is. While Playside Studios is a Stockhead advertiser, it did not sponsor this article.