Market Highlights: Commodities soar after China’s cash splash; and 5 ASX small caps to watch

ASX set to rise as market anticipates CPI report later today
China’s stimulus boosts commodity prices, lifting copper, lithium, and iron ore
Nvidia jumps after reports that CEO Huang has finished selling shares

The ASX is set to rise this morning as the market gears up for the latest CPI report, which will give us a better idea of how inflation is tracking.

At 8am AEST, the SPI ASX200 futures contract was pointing up by 0.25%.

Overnight, the S&P 500 finished higher by 0.25%, the Dow Jones was up by 0.20%, and the tech heavy Nasdaq climbed by 0.56%.

Commodity prices got a nice boost after China’s central bank unveiled unprecedented stimulus measures yesterday to rev up its economy.

China rolled out a wide-ranging package that included lower reserve requirements for banks and over 800 billion yuan in liquidity support for the stock market.

Copper, lithium and silver prices jumped by over 4% overnight, while crude prices lifted by 1% on the news.

Iron ore prices also climbed by 6%, with US-listed shares of BHP (ASX:BHP) and Rio Tinto (ASX:RIO) jumping by around 5%.

On Wall Street, the VIX Index, which measures market volatility and is also called the market’s “fear index” dropped by 3%, suggesting the market expects steadier days ahead.

Nvidia was up 4% after after news that CEO Jensen Huang finished selling his shares after reaching the limit of 6 million shares allowed under a trading plan. He still owns over 75 million shares of Nvidia directly and another 785 million through trusts.

Visa Inc. dropped 5.5% following reports that the US Justice Department is set to file a lawsuit claiming it has a monopoly on debit cards.

Estee Lauder popped 6% on China’s stimulus package news as the beauty brand gets nearly a third of its sales from the Asia region.

‘Misery index’ still high

Back home, we’ll get to see the monthly CPI data at 11:30am AEST. Economists expect the annual growth to drop to 2.7%, down from 3.5%.

Recent data from the Committee for Economic Development of Australia (CEDA) shows that Australia’s “misery index” is still elevated due to ongoing and persistent inflation.

Unlike past economic downturns where high interest rates or unemployment were dominant factors, inflation now contributes to about half of the distress felt by Aussies from June 2021 to September 2023 – according to the survey.

Yesterday, the RBA kept Australia’s current cash rate on hold at a 12-year high of 4.35%.

In her press conference, RBA governor Michele Bullock said that current projections suggest it will take time for inflation to fall within the target range, indicating that the RBA board “does not see interest rate cuts” in the near term.

“What we are doing is what we think is best to maintain this narrow path of bringing inflation back down, because it is still too high,” she said.

For Australians, this means interest rates are likely to stay elevated for now, and high prices may take longer to subside.

To other markets …

Gold price rose by 1.2% to US$2,658.30 an all-time high.

Oil prices closed 1.7% higher on China’s stimulus news and as Israel ramped up its attacks in southern Lebanon. Brent crude now trading at US$75.15 a barrel.

The benchmark 10-year US Treasury yield traded 2 basis points lower (bond prices higher) at 3.73%.

Bitcoin was up 2% in the last 24 hours to US$64,430, and Ethereum lifted by 0.3% to US$2,659.

Meanwhile, iron ore jumped by 6% to $US95.15 a tonne on China’s news.

5 ASX small caps to watch today

Black Canyon (ASX:BCA)
BCA said that further heavy liquid separation can upgrade manganese feedstock from about 30% to 35% manganese. This higher-grade product is promising for use in high-purity manganese sulfate processing and as a feed for manganese alloy smelters. The new test work builds on earlier results that achieved a consistent 32% manganese grade. BCA has also completed metallurgical testing on 400 kg of drill samples from its fully owned KR1 and KR2 deposits. The samples were taken from five drill holes at depths of up to 10 meters and are intended to produce a high-quality manganese concentrate for further testing.

Infini Resources (ASX:I88)
Dr Martin Ross, a glaciology expert, has confirmed that the high-grade uranium found in soils at Portland Creek Uranium Project in Newfoundland, Canada, owned by Infini, likely comes from a local source rather than being transported by glaciers. His analysis, based on the area’s geology, indicates that the soil samples were collected from colluvial sediments, meaning the uranium is nearby. Additional work is underway to map the area’s hydraulic gradients using LiDAR imagery, and the results from recent soil assays are expected by the end of October. This study will help to reduce risks before Infini moves forward with diamond drilling activities at the project.

MTM Critical Metals (ASX:MTM)
MTM reported promising results from its use of Flash Joule Heating (FJH) technology to recover metals from electronic waste. The initial findings show about 67% recovery of silver and 48% recovery of copper from printed circuit boards, with the possibility for even higher yields as the process improves. This method is environmentally friendly, avoiding toxic chemicals and minimising environmental impact, unlike traditional recovery methods that can produce harmful waste. With over 60 million metric tonnes of e-waste generated each year, containing valuable metals worth more than $70 billion, MTM says this technology could significantly transform e-waste recycling and make metal recovery more sustainable.

GenusPlus (ASX:GNP)
GenusPlus has been awarded a contract to design and construct 33kV power distribution infrastructure for Fortescue’ decarbonisation strategy, valued at around $28 million. This project involves approximately 41 kilometres of both underground and overhead power lines at Fortescue’s Eliwana and Flying Fish mine sites, with completion expected in the third quarter of 2025. Genus will employ about 40 staff to start work immediately.

Maronan Metals (ASX:MMA)
Maronan has reported promising results from infill drilling in the Starter Zone, revealing wide intercepts of ore-grade silver and lead that boost resource confidence. One drill hole, MRN24003, intersected 17.1 metres of 3.6% lead and 103 g/t silver, including a section with 7.11 metres of 5.4% lead and 197 g/t silver. Another hole, MRN24003W1, showed similar results, confirming consistency, while MRN24004 intersected 15.85 metres of 4.1% lead and 111 g/t silver. These findings indicate strong continuity in the mineralisation, which could provide cost advantages for further mining.

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