The Match Out: ASX gives up early strength, mixed performance across the board, Telix (TLX) tumbles

Local equities initially defied weak overnight leads to trade high for the first hour. The rally turned sour before midday though with news hitting the wires that the Whitehouse would turn down any talk of currency intervention, and local retail sales data came in higher than expected to further lift the odds of a 50bp hike from the RBA at the next meeting. Coal stocks rallied on the back of strength in the energy markets on news the Nord Stream gas pipelines into Europe were tampered with, though other energy stocks were unable to keep up. The financial sector was the biggest drag on the index today with global recession fears still front of mind for investors.

• The ASX 200 finished up -34pts/ -0.53% at 6462
• The Utilities sector was best on ground (+1.90%) while Telcos (+1.39%) & Energy (+0.07%) were the only other sectors in the green.
• Tech (-1.61%) and Consumer Discretionary (-1.05%) the weakest links.
• Stocks were initially higher this morning defying weakness overseas before comments from the Whitehouse downplaying any potential for currency intervention (to stem the high $US) saw US Futures turn lower, dragging Asian stocks along for the ride.
• Local retail sales were stronger than expected this morning, printing 0.6% MoM versus the 0.4% tipped. This increases the chance for another 0.5% rate hike in October. We’re clearly still spending at a rate of knots!
• A deeper look at the numbers shows food was the main driver of the retail growth, both eating out and cooking at home, while clothing, footwear & accessories fell more than 2%.
• We also saw a better than the expected budget outcome for fiscal 2022, with higher commodity prices leading to a $47.8 billion improvement on forecasts, a deficit equating to just 1.4% of GDP, although Jim Chalmers quick to play down the trends so far in FY23.
• Telix Pharmaceutical (ASX: TLX) -15.4%, the oncology company saw shares tumble on delays to approvals in Europe. More on that below.
• Nickel Mines (ASX: NIC) -3.75%, took on an additional 40% stake in the Oracle Nickel project for $US212m, now holding a controlling 70% stake.
• Lead Portfolio Manager James Gerrish was on Talking Finance with Alan Kohler today discussing markets – Listen Here
• Iron Ore was marginally higher in Asia today producing mixed results for the bulk miners. Fortescue (ASX: FMG) tumbled -2.14%
• Gold was marginally higher overnight, but gave back any strength with a -0.4% fall today to US$1622 in Asian trade today
• Asian stocks performed poorly today. Nikkei -1.50%, Hang Seng was worse off at -2.67% at the time of writing.
• US Futures are all lower. S&P futures facing -0.5%, Nasdaq -0.75%.

ASX 200 Chart

Telix Pharmaceutical (TLX) $4.56

TLX -15.4%: the oncology company announced that they have pulled an application to market into Europe. The Danish Medicines Agency requested further testing numbers for their manufacturing practices to confirm the safety of Telix’s Illuccix product. The radioactive product is used in prostate cancer imaging and was on track for its first EU sales by mid-2023. The company expects to resubmit the application with the additional requests however they would not put a timeframe on the filing.

Broker Moves

• Universal Store Raised to Neutral at Macquarie; PT A$4.90
• Capricorn Metals Raised to Buy at Canaccord; PT A$3.90
• Worley Raised to Neutral at JPMorgan; PT A$12.80

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