• Both the ASX 200 and small cap index were in the red again today
  • 9 out 11 sectors finished lower led by utilities, with Energy and Industrials gaining
  • Albanese reckons the Labor Government has got the energy mix right 

The ASX 200 was down today, shaving 0.78% and the ASX XEC was down 0.43%.

A total of 9 out of 11 sectors were lower, led by utilities which lost 2.09%.

The sector leading the winners was Energy, up 0.35% which may or may not have anything to do with Anthony Albanese’s Labor Government energy legislation – the one that’s meant to cap coal and gas prices for 12 months – which passed Parliament today.

“We think we’ve got the balance right here,” the PM told Michelle Grattan.

“A temporary price cap of $12 for gas and $125 for coal will ensure that the worst impact of the Russian invasion of Ukraine and these global price spikes that we’re seeing impacting households and businesses can be alleviated. 

“And that combined with support for households who are most in need, I think, presents a package that received the support of state and territory governments and will receive the support of the Parliament today.”

If you want to know more about who’s set to profit from the plan, Stockhead’s Jack McGinn has all the details here.

 

NOT THE ASX

Chinese shares ended mixed yesterday after the country released weaker-than-expected November economic indicators – suggesting the recovery of the world’s largest economy is still a while away, Morningstar says.

European stocks fell too after the European Central Bank (ECB) raised interest rates by 50 basis points and said it expects rates to rise “significantly” further.

“This is not a pivot, this is not a slowdown, we are in for the long game,” ECB President Christine Lagarde said.

Lagarde “reset market expectations for how high rates can go, which should cripple the economy,” Oanda analyst Edward Moya wrote. 

“If the next couple of meetings contain consecutive half-point rate increases, the eurozone will have a much deeper recession.”

Yikes.

And in the US, central bank officials on both sides of the Atlantic signaled they have more work to do to tame inflation and a batch of fresh data heightened recession fears.

The major US stock indices started the week higher, then fell Wednesday when the Federal Reserve raised rates by half a percentage point, but what spooked investors wasn’t the rate increase so much as the fact that the Fed raised its estimates of how high rates may ultimately have to go.

But apparently investors are getting used to the whiplash.

“There are likely to be fits and starts, some head fakes, and that explains the changing market sentiment from day to day or week to week,” said Kristina Hooper, chief global market strategist at Invesco. 

“It’s likely to continue until a Fed pause is imminent.”

 

ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks:

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The biggest winner was Meteroic Resources (ASX:MEI) who announced a binding deal to purchase “a Tier 1 Ionic Clay Rare Earth Element (REE) project” called Caldeira in the Minas Gerais State of Brazil for $US20m, plus a 4.75% royalty.

More than 13,000m of drilling into the Caldeira project has returned numerous very high-grade results up to 25,000ppm from surface – that’s much higher than the average.

The TREO identified across Caldeira also represents an enriched heavy REE basket with magnet REOs – Tb2O3, Dy2O3, Nd2O3 and Pr2O3 – averaging greater than 22% of TREO.

“The Caldeira Project is a 15km scale, ultra-high-grade ionic clay deposit which is completely open at depth, and it has the potential to host large, high grade rare-earth element-ionic clays and represents an enormous opportunity for Meteoric,” MEI director Andrew Tunks says.

“Of the 1,311 holes drilled, over 85% finish with grades in excess of 1,000ppm TREO.

“The depth of the deposit is at this stage unknown and Meteoric is preparing to mobilise a diamond drilling team to site in January 2023 to commence further exploration to better understand the Caldeira Project’s scale and depth.”

Resource estimations for the highest priority target areas are envisaged to be completed by the end of Q2 2023 to allow a preliminary economic assessment (PEA) of the project to begin.

Norwest Energy (ASX:NWE) received an off market takeover bid from major shareholder Mineral Resources (ASX:MIN) valued at 6c per share —  a 33% premium to the last closing price.

“We are carefully considering the terms of the Offer by MinRes and will comment as soon as we have completed our assessment,” Norwest MD Iain Smith.

And in more rare earths news, Caprice Resources (ASX:CRS) has picked up the 380km2 Mukinbudin Rare Earth Element (REE) Project in WA, which also includes an operating quarry which the company says will provide key insights into pegmatite mineral composition and zonation, allowing fast tracking of exploration works in the broader tenement.

 

ASX SMALL CAP LAGGARDS

Here are the worst performing ASX small cap stocks:

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TRADING HALTS

Labyrinth Resources (ASX:LRL) – Placement to “strategic sophisticated and professional investors”, so dress nice or they won’t let you in. No shoes, no shirt, no shares.

Amani Gold (ASX:ANL) – Capital Raise.

Cobre (ASX:CBE) – Capital Raise.

Elmore (ASX:ELE) – Capital Raise.

 

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