Market Wraps

Evening Wrap: ASX 200 gains, lithium developers and tin stocks surge, gold takes a breather

Mon 17 Apr 23, 4:57pm (AEST)

 The S&P/ASX 200 closed 20 points higher, up 0.27%. 

The local sharemarket extends gains for a second straight session, the ASX 200 Discretionary Index rallies to a 14 month high, tin stocks surge as 10% of the world's production is at risk, gold stocks pullback sharply and a handful of broker takes on lithium, miners and Australian agriculture.

Let's dive in.


Today in Review

Mon 17 Apr 23, 4:19pm (AEST)

Name Value % Chg
Major Indices
ASX 200 7,381.5 +0.27%
All Ords 7,578.1 +0.23%
Small Ords 2,914.4 -0.34%
All Tech 2,294.2 +0.47%
Emerging Companies 2,148.1 -0.61%
Currency
AUD/USD 0.6711 +0.01%
US Futures
S&P 500 4,172.75 +0.22%
Dow Jones 34,100.0 +0.19%
Nasdaq 13,198.0 +0.13%
Name Value % Chg
Sector
Real Estate 3,110.6 +1.32%
Consumer Discretionary 3,094.8 +0.74%
Information Technology 1,586.9 +0.71%
Industrials 6,839.5 +0.50%
Financials 6,308.5 +0.36%
Communication Services 1,555.7 +0.19%
Materials 18,748.7 +0.07%
Health Care 44,398.6 -0.03%
Consumer Staples 13,705.8 -0.03%
Utilities 8,503.3 -0.30%
Energy 10,878.4 -0.31%

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ASX 200 Session Chart

S&P ASX 200 (LIVE DATA) Share Prices & Charts - Market Index
Another positive close but off session highs (Source: Market Index)

Markets

A relatively uneventful session. The ASX 200 is up 12 of the last 14 sessions, now sitting at a two month high. The index eased a little off session highs of 0.4%.

  • Real Estate led to the upside thanks to broad-based gains from names including Scentre Group, Stockland, Vicinity Centres and Goodman Group

  • Discretionary stocks were higher as heavyweight Wesfarmers rallied to levels not seen since February 2022

  • Defensive and resource stocks led to the downside

Economy

No major economic announcements. Tomorrow we have (AEST):

  • 11:30 am: RBA Meeting Minutes

  • 12:00 pm: China Q1 GDP Growth Rate (4.0% expected, 2.9% in 4Q22)

  • 12:00 pm: China Industrial Production, Retail Sales, Unemployment, Fixed Asset Investment for March


Latest news


Market Insights

Tin prices surge

China's most traded tin futures jumped 10% on Monday after Myanmar's Wa State suspended all mining operations by August 1 to protect its remaining mineral resources. In 2020, Myanmar produced an approximate 44,000 tonnes of tin, which accounted for about 10% of the world's total tin production.

Tin prices have halved from March 2022 highs of almost US$50,000 a tonne. Could Myanmar taking supply offline be a major catalyst to bring prices back to life?

Metals X (ASX: MLX), one of the most advanced tin pure plays, rallied 18.6% on Monday to a near two month high.

Gold: A pullback

Gold prices fell around 2% last Friday as the market begins to realise the world isn't ending quite yet (or because of a bounce in bond yields and the US dollar).

Several ASX-listed gold names that have experienced V-shaped rallies eased 3-5% on Monday. So now we're in an awkward place where the stocks are technically overextended but gold is trying to hold that key US$2,000 level.

Here are some interesting takes for gold bugs.

Bank of America says the US dollar is entering its fourth bear market in the last half century.

US d
Source: Bank of America

The sentiment for gold is a little bit above neutral, which suggest there's a lot more room for optimism. Aka things aren't full blown frothy.

Gold Optix (1)
Gold optix (Source: SentimenTrader)

Interesting news and movers

Trading higher

  • +18.5% Lake Resources (LKE) – Lilac increases Kachi stake to 20%

  • +17.6% Atlantic Lithium (A11)

  • +16.95% Metals X (MLX) - Tin prices jump

  • +16.7% Linsay Australia (LAU) – FY guidance

  • +13.9% EML Payments (EML) – Strategic review, CEO resigns

  • +10.3% Sayona Mining (SYA) – Upgrades Moblan resource

  • +10.0% Genesis Minerals (GMD) – To acquire St Barbara assets

Trading lower

  • -34.7% AMA Group (AMA) – Revises FY23 guidance

  • -25.0% Tigers Realm Coal (TIG) – DFAT deems ops likely prohibited

  • -9.5% New Hope (NHC) – Ex-dividend

  • Gold sector move: Westgold (-7.0%), Bellevue Gold (-5.6%), Perseus (-4.0%), Ramelius (-3.3%)


Broker updates

Macquarie on lithium:

  • “Total plug-in sales in the US rose 3.2% MoM to 111k units with a 23.9% increase in PHEV sales growth while BEV sales were largely flat.”

  • “China EVs sold in March increased by 24.4%, shrugging off concerns of Internal Combustion Engine stock clearance impacts.” 

  • “The EV sales in Europe saw a strong rebound, up 87.5% MoM with higher sales in both BEV and PHEV sales at 159k and 64k, respectively.”

  • “MIN and PLS are our preferred producers with PMT and GL1 key picks of the exploration plays.”

Morgan Stanley on OZL, BHP and Rio Tinto:

  • “Adding OZL into BHP adds an average 3% pa Cu Eq growth for FY24/25e, followed by an average of ~5% in later years.”

  • “BHP, post completion of OZL deal is expected to be in the upper half of its US$5-15bn net debt range,adding current provisions of US$3.3bn (with potential upside risk to Samarco provisions) could impact BHP's ability to pay dividends.”

  • “RIO still enjoys a higher CuEq CAGR vs. BHP post completion of the OT transaction.”

  • MS is Overweight on Rio and Underweight on BHP 

UBS on Australian agriculture:

  • “The global agriculture backdrop for FY23 appears favourable with soft commodity prices and hence farmer profitability well above LT averages.”

  • “This continues to be driven by very tight global grain & oilseed stock-to-use ratios which are at c.15yr lows.”

  • “Solid planted area growth as well as elevated soft commodity prices mean that farmers should be incentivised to maximise yield by applying agchems such as crop protection products.”

  • UBS is Buy rated on Nufarm with a $7.50 target price and Neutral on Elders with a $9.20 target price


Scans

Top Gainers

Code Company Last % Chg
BMG BMG Resources Ltd $0.02 +66.67%
POL Polymetals Resour... $0.295 +63.89%
EFE Eastern Resources... $0.015 +36.36%
AR3 Australian Rare E... $0.808 +30.24%
TMB Tambourah Metals Ltd $0.12 +29.03%
View all top gainers

Top Fallers

Code Company Last % Chg
PVS Pivotal Systems C... $0.011 -57.69%
BTC BTC Health Ltd $0.016 -36.00%
AMA AMA Group Ltd $0.165 -32.65%
HCD Hydrocarbon Dynam... $0.012 -29.41%
LME Limeade Inc $0.15 -26.83%
View all top fallers

52 Week Highs

Code Company Last % Chg
POL Polymetals Resour... $0.295 +63.89%
AR3 Australian Rare E... $0.808 +30.24%
LM1 Leeuwin Metals Ltd $0.39 +27.87%
XAM Xanadu Mines Ltd $0.054 +17.39%
LAU Lindsay Australia... $1.22 +16.19%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
PVS Pivotal Systems C... $0.011 -57.69%
BTC BTC Health Ltd $0.016 -36.00%
PHL Propell Holdings Ltd $0.03 -25.00%
SRL Sunrise Energy Me... $1.39 -14.72%
KLI Killi Resources Ltd $0.058 -13.43%
View all 52 week lows

Near Highs

Code Company Last % Chg
SMLL Betashares Aust S... $3.56 -0.28%
OZBD Betashares Austra... $45.10 -0.22%
IKO Ishares MSCI Sout... $96.42 -0.23%
WVOL Ishares Edge MSCI... $36.50 +0.36%
HLTH Vaneck Global Hea... $10.89 +0.28%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
ZIM Zimplats Holdings... $26.23 +4.09%
RHY RHYTHM Bioscience... $0.513 +6.77%
CMW Cromwell Property... $0.58 -0.86%
LFSPA Latitude Group Ho... $90.60 +0.89%
CWY Cleanaway Waste M... $2.47 +0.41%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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