Top 10 at 11: ASX climbs despite tech retreat; resources lead gains

Morning, and welcome to Stockhead’s Top 10 (at 11… ish), highlighting the movers and shakers on the ASX in early-doors trading.

With the market opening at 10am sharp eastern time, the data is taken at 10.15am in the east, once trading kicks off in earnest.

In brief, this is what the market has been up to this morning.

Life360 leads losses despite strong numbers

The ASX 200 has had a slow start to the day, tipping up just 18.4 points or 0.21% in the first hour of trade.

Six of 11 sectors are in the green. Info tech is plunging, down 2.86% after Wall Street’s tech sector fell 0.72% overnight.

Location services app company Life360 (ASX:360) is leading losses in tech despite smashing expectations with its recent quarterly reporting.

The stock is down 11% as of about 10:30 AEDT after falling more than 5% yesterday.

Analysts are speculating the price weakness comes from 360’s acquisition of the Nativo advertising platform for US$120 million in cash and stock.

No one is quite sure where the bearishness is coming from, considering the company lifted its YoY revenue 34% to $124.5 million and its EBITDA 174% to $24.5 million.

RBC Capital Markets analyst analyst Wei-Weng Chen described 360’s performance as “very strong” and speculated some of the share price movement may be coming from weaker-than-expected monthly user growth.

It’s taken most of the wind out of the market’s sails, at least for now.

On the bright side, Mineral Resources (ASX:MIN) has jumped 7.6% after selling 30% of its lithium business in a joint venture deal with South Korea’s POSCO.

The deal values MIN’s lithium operations at $3.9 billion vs. consensus of just $2.7 billion, a bullish flag for the wider lithium market.

Look out for some potential movements in lithium stocks today – China has just announced a reform to lithium royalites and environmental fees and compliance bonds.

The new regulations are expected to increase lithium production costs by up to US$20-30 a tonne for Chinese firms, potentially offering some support for hard rock producers.

SMALL CAP WINNERS

In the news…

Lion Rock Minerals (ASX:LRM) is gearing up for an infill drilling program at the Minta Est project in Cameroon, where the company has identified a source of monazite and heavy rare-earths.

Sampling points to high levels of the rare earth samarium and similar heavy rare earth elements including dysprosium and terbium.

The US recently recognised samarium as the most vulnerable critical mineral, describing it as the “weakest link in the critical mineral supply chain”.

SMALL CAP LAGGARDS

In the news…

NT Minerals (ASX:NTM) has terminated discussions regarding a potential share sale agreement to acquire exploration tenements. The company says it’s considering other opportunities, but gave no further details.

ARN Media (ASX:A1N) shared a pessimistic trading update. The advertising company says its YTD revenue for October is down 10%, and expects its full year EBITDA to be about 25-27% lower than the previous year.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.