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The ASX slipped ever so slightly today, though certainly performed better than feared prior to market open given the overnight escalation in the Middle East and rate hike expectations jumping over the past few days. A renewed spike in oil prices and global bond yields was largely shrugged off at the index level, though put pressure on rate-sensitive areas of the market as consumer names took a hit. The move lower was reasonably broad with 7 of 11 sectors modestly lower, however strength across Energy and parts of Resources kept the index-level decline modest.
- ASX 200: -9.26pts (-0.10%) to 9,066.70
- AUD/USD: 0.7168, flat
- Best sectors: Energy +1.18%, Materials +0.85%, Healthcare +0.40%
- Worst sectors: Consumer Disc. -1.81%, Communications -1.66%, Consumer Staples -1.38%
- Consumer Discretionary was again the problem child, with Wesfarmers (ASX: WES) -2.97% to $77.08 after trading ex-vidiend, Super Retail (ASX: SUL) -2.23% to $13.15, Lovisa (ASX: LOV) -2.37% to $25.11 and Harvey Norman (ASX: HVN) -2.57% to $4.17 among those sold off. The sector has quickly gone from slightly positive YTD in early August to around 9% lower for the year, with rising rates and fuel costs adding to the softer consumer backdrop.
- Energy bucked the broader weakness as Brent pushed through US$91/bbl following renewed fighting in the Middle East. Refining margins remain particularly strong, with diesel futures trading close to record highs and downstream names such as Viva Energy (ASX: VEA) +2.70% to $3.04 and Ampol (ASX: ALD) +1.72% to $43.80 continuing to benefit.
- Resources were generally firmer. Lithium names caught a bid after Chinese lithium carbonate futures rose 3.2%, while coal stocks were also well supported following a huge August for Chinese coking coal, where futures rallied 46% amid tightening supply.
- BHP (ASX: BHP) +0.92% to $66.84 helped keep the index afloat, along with the broader resources sector. Held in the Active Growth and Income Portfolios.
- Liontown (ASX: LTR) +6.53% to $1.305 was stronger after announcing a staged farm-in to the Centenario lithium brine project in Argentina, giving it the ability to earn up to 100% of the project. It adds another growth option outside Kathleen Valley, although the deal will ultimately involve additional capex and milestone payments. Held in the Emerging Companies Portfolio.
- Mineral Resources (ASX: MIN) +0.57% to $65.00 was in focus after ASIC closed its investigation into the company and Chris Ellison without taking enforcement action, removing another lingering governance overhang for the stock.
- Light & Wonder (ASX: LNW) -1.53% to $129.92 fell after Caledonia Investments sold $375m worth of shares through a block trade. The sale represented around 3.9% of the company and came after LNW had rallied roughly 15% over the previous month.
- NRW Holdings (ASX: NWH) +3.44% to $7.82 was supported after securing a $960m, five-year extension to its mining services contract at the Karara iron ore mine, extending its tenure through to February 2032.
- Collins Foods (ASX: CKF) +2.21% to $8.33 traded well after its AGM update showed group sales up 6.6% over the first 17 weeks of FY27. Australia remains solid, but the more encouraging part was Europe, where recent trading showed a clear improvement after a soft start to the year.
- Gold: firmed around US$4,433 / -0.1%
- Brent crude: around US$91/bbl / +0.55%
- Iron Ore: US$99.50 / +0.5%
- S&P 500 E-mini futures: +1.75pts / +0.02%
- Dow E-mini futures: +22.00pts / +0.04%
- FTSE futures: -53.00pts / -0.49%
