Market Highlights: Wall Street’s selling spree, BoE and ECB’s 50bp gift, and 5 ASX small caps to watch on Friday
Local shares are set to fall sharply on Friday as US tech stocks plummeted overnight. At 8am AEDT, the ASX 200 Dec futures contract was pointing down by 1.05%.
The tech-heavy Nasdaq fell by over 3% in New York as investors worry the Fed might be deliberately attempting to tip the economy into a recession in order to bring inflation under control.
Both the S&P 500 and Dow Jones indexes also fell sharply, down by 2.5% and 2.25% respectively.
Mega tech stocks like Apple, Alphabet and Microsoft all declined, and only 14 stocks in the S&P 500 index ended in the green.
The negative sentiment was further exacerbated by the downbeat US retail sales report, which showed a fall of 0.6% in November, suggesting that consumers may have succumbed to inflation.
The Aussie dollar also tumbled by 2%, the worst daily fall since March 2020. As of writing, the Aussie is trading at US67c.
Meanwhile, the Bank of England (BoE) raised its key rate by a half a per cent to 3.50%,the highest level since 2008. The BoE minutes noted that more rate hikes could be needed.
“The Bank of England seems to be intentionally driving the UK’s consumer-led economy into a deeper recession, putting households and business harder under the cosh, in order to cool inflation,” said Nigel Green, CEO of consulting firm deVere.
The European Central Bank (ECB) also raised its key rate by 50bp, sending European bond yields surging higher.
ECB President Lagarde signalled that future rate increases will need to be significant and done at a steady pace.
“Lagarde reset market expectations for how high rates can go, which should cripple the economy,” said OANDA analyst, Edward Moya.
Oil prices were a little lower overnight after recording three consecutive days of gains.
This comes as EU countries reached a deal on a ninth package of Russian sanctions over its Ukraine invasion.
The new sanction targets Russia’s banks, access to drones, and the country’s second richest man Vladimir Potanin, who owns 33% of Norilsk Nickel.
In other markets, gold was down 1.7% to US$1,776.75, while the spot iron rose 1% to US$110.50.
Bitcoin dipped 2.3% in the last 24 hours to US$17,414.
“Bitcoin’s weakness is somewhat limited, and won’t draw much attention unless price action dips below the $16,800 level,” said Moya.
The geoscience tech company announced the launch of iChromite, a new suite of automated mineral chemistry assessment tools it has developed that can identify exploration targets more efficiently and accurately. SensOre says the mineral chromite is extremely stable in highly weathered environments. It preserves its unique geochemical fingerprint over geological time, and thus has great utility for reliable detection of potential mineralisation and fertility.
Norwest Energy (ASX:NWE)
Mineral Resource (ASX:MIN) has made a move to acquire all the shares in Norwest that it does not already own. MinRes intends to offer one fully paid ordinary share in MinRes for every 1,367 Norwest shares. Norwest is MinRes’ minority joint venture partner in the Lockyer Deep gas project in the Perth Basin.
Musgrave Minerals (ASX:MGV)
Murgrave says mining leases have been granted over its Big Sky and White Heat deposits covering all areas that are the focus of its Stage 1 Pre-feasibility studies at the Cue Gold Project. Strong total gold recoveries have been confirmed on composite samples from both White Heat and Big Sky.
Noxopharm’s strategic partner, the Hudson Institute of Medical Research, has received a $1.5 million grant from the National Health and Medical Research Council. The funds will be used to support Noxopharm’s Sofra pipeline to further develop its first-in-class drug candidate to treat chronic inflammatory conditions.
Sierra Nevada Gold (ASX:SNX)
Sierra has identified visible gold in one of its recently completed reverse circulation (RC) holes at the New Pass Gold Project in Nevada. Visually encouraging quartz veining has been encountered in all six holes drilled to date at New Pass. SNX will resume drilling as soon as weather permits in 2023.