• The ASX is set to open slightly higher on Tuesday
  • Wall Street fell almost 2% overnight as protests in China spread
  • Crypto lender BlockFi has filed for bankruptcy

The ASX is poised to edge slightly higher on Tuesday despite a 1.5% – 1.75% fall in New York overnight. At 8am AEDT, the ASX200 Dec futures contract was pointing up by 0.15%.

Overnight, Wall St tumbled as traders weighed the impact of protests across China as well as a barrage of Fedspeak.

Latest reports indicate that large numbers of the Chinese national guard have been deployed to hot spots around the country to quell the protests.

 

This kind of public defiance is unprecedented in the Xi Jinping era, and analysts said it could spiral into a political crisis bigger than the 1989 Tiananmen protests.

“Despite how much time has passed and what other countries have achieved, it would appear China is not prepared for a significant loosening of restrictions, which could mean that frustration we’re seeing continues to bubble over,” said OANDA analyst, Craig Erlam.

Commodities and metal prices reacted negatively as the story unfolded, with the iron ore price slipping 1% to US$98.90 a tonne overnight.

The oil market has also been hit hard by the events, as EU countries continue to discuss details of the Russian oil cap.

“The outcome [of EU talks] will likely factor in how OPEC+ responds this weekend, and I expect the rumour mill will therefore be busy as the week progresses, which in turn could trigger a lot of oil price volatility over the course of the week,” said Erlam.

Another reason for the selloff on Wall Street overnight were words from various Fed officials.

Fed Bank of St Louis president James Bullard said the market might be underestimating the probability of more and larger rate hikes, while his New York counterpart said the Fed needs to step up its game to curb inflation.

Fed vice chair Lael Brainard however was more dovish, saying: “The inflation data [last week] was reassuring, preliminarily. It will probably be appropriate, soon, to move to a slower pace of rate increases.”

Shares of companies with big factories in China came under pressure, with Apple falling another 2.75%.

Meanwhile, Bitcoin has also fallen by 2% in the last 24 hours to US$16,245.

As expected, crypto lender BlockFi Inc has filed for bankruptcy after warning customers two weeks ago that it would halt withdrawals following FTX’s collapse.

“We’re trying to separate the wheat from the chaff here, and I don’t think many people were surprised by the BlockFi filing,” said Mark Connors, portfolio manager at 3iQ.

 

5 ASX small caps to watch today

ikeGPS (ASX:IKE)
IKE has reported a 170% increase in revenue for the first half to $15.4m. Net profit was $1.1m, translating to a $7.3m improvement over pcp (loss of $6.2m). The company said it has a pipeline of significant contract backlog, which supports its bullish growth outlook.

Immutep (ASX:IMM)
Immutep has entered into a second clinical trial collaboration agreement with Merck and Pfizer to study Immutep’s LAG-3 candidates, Eftilagimod Alpha and Avelumab, to treat urothelial cancer. First patient is expected to be enrolled and dosed in H1 of calendar year 2023.

Findi (ASX:FND)
The payment fintech reported revenue of $24.387m for the first half, up 14.1% on pcp. Bottom line EBITDA was $6.816m, up 133.9% on pcp. Last month, Findi said that it has successfully deployed its 500th ATM in India, and the balance of 2,050 ATMs is on track to be completed by the end of this financial year.

DevEx Resources (ASX:DEV)
The company says assays from its Nabarlek Project in the NT shows a unique high-grade exploration and growth opportunity, ready for the new era of uranium demand. Drilling results include: 10.1m @ 1.10% U3O8 from 124.1m.

Larvotto Resources (ASX:LRV)
Larvotto is preparing to drill for lithium at its 100%-owned Eyre Project in WA. A Programme of Work has been approved and Heritage Survey is underway. A drill rig has been secured to undertake 4,000m of drilling. The aircore drilling will follow up on a lithium anomaly found at the Merivale Prospect previously.

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