The Match Out: Bond Yields and Geopolitical tensions sink ASX

The ASX caught a cold from the weakness seen in the US overnight. Selling came on the back of Fed Chair Jerome Powell’s hawkish comments which sent to the US 10-year rate to 16-year highs, just a shave shy of 5%. Further tensions in the Middle East also weighed on growth assets, though that was supportive of Energy and Precious Metals, two areas of the market that largely bucked the trend today. The ASX200 fell -150pts/-2.13% during the week.

• The ASX 200 finished down -80pts/-1.16% at 6900.
• The Energy sector was best on ground by default as the only sector in the black today (+0.16%)
• Materials (-1.69%), Telcos (-1.43%) and Healthcare (-1.43%) the weakest links while Tech and Financials also saw falls of more than 1%.
• Liontown Resources (ASX: LTR) -31.9% came back online post equity raise, ~$400m at $1.80, below the $2.20-$2.60 range they were hoping for initially, however, we hear demand was strong in the book at that level, LTR closed today at $1.90
• Insignia (ASX: IFL) -12.82% hit a new 52-week low on news CEO Renato Mota is stepping down by mutual agreement – Renato had a tough gig turning around IFL, we thought he was doing a pretty good job under the circumstances.
• Cleanaway (ASX: CWY) -1.26% held their AGM today, and importantly, provided FY24 guidance that was a touch below expectations – guidance for $350m EBIT vs market expectations for $354m – not as big issue and like us, the market was concerned heading into the update. Wouldn’t be surprised if the stock went up from here.
• Lynas (ASX: LYC) -1.87% put out a mixed 1Q update with production up, though sales were held back on softer pricing, choosing to build stockpiles. Demand is showing signs of life according to the update and the company’s balance sheet is in great shape. The market is watching progress at their new Kalgoorlie processing facility.
• Paladin (ASX: PDN) +3.17% bucked broader weakness as they talked more about offtakes, Uranium stocks were a rare pocket of strength overnight.
• Alumina (ASX: AWC) -8.99% knocked for a second day following a softer quarterly update from JV partner Alcoa. The company is waiting on an update from the Environmental Protection Authority which could derail their bauxite & alumina asset.
• Gold was one area that screened green today, the best of them being Evolution (ASX: EVN) +2.22% and Northern Star (ASX: NST) +1.25%.
• Iron Ore was down -1.2% in Asia
• Gold edged higher trading at US$1976.50 at our close.
• Asian stocks were soft but held up better than the local market. Hong Kong -0.40%, Japan -0.17%
• US Futures are down, S&P500 off -0.15% and Nasdaq -0.3% at our close.

ASX 200 chart - intraday

ASX 200 chart - daily

Sectors this week - source Bloomberg

Stocks this week - source Bloomberg

Broker moves

• Mayne Pharma Raised to Market-Weight at Wilsons; PT A$3.20
• ARB Raised to Buy at Citi; PT A$35.18
• Pantoro Raised to Buy at Bell Potter; PT 5 Australian cents
• OreCorp Raised to Speculative Buy at Bell Potter
• Nick Scali Raised to Outperform at Macquarie; PT A$12.60
• Santos Raised to Buy at CLSA; PT A$9.80
• Alumina Raised to Neutral at Barrenjoey; PT A$1
• Northern Star Raised to Buy at Jefferies; PT A$14
• Northern Star Cut to Neutral at JPMorgan; PT A$11.75

Major movers today 

Enjoy the night
The Market Matters Team

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