Market Wraps

Evening Wrap: ASX 200 lower as lithium minerals prices plummet in China

Mon 27 Nov 23, 5:52pm (AEDT)

The S&P/ASX 200 closed 53.2 points lower, down 0.76%.

It was a tough day at the office for Aussie investors as the local bourse was dragged lower by weakness in Asian markets. Interest rate sensitive and resources stocks were weaker as local lithium plays reacted negatively to a sharp drop in lithium minerals prices. Gold stocks were the only shining light.

Let's dive in.


Today in Review

Mon 27 Nov 23, 4:31pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 6,987.6 -0.76%
All Ords 7,192.8 -0.71%
Small Ords 2,671.3 -0.47%
All Tech 2,430.6 +0.10%
Emerging Companies 1,890.5 -0.34%
Currency
AUD/USD 0.6575 -0.16%
US Futures
S&P 500 $4,553.5 -0.32%
Dow Jones $35,338.0 -0.26%
Nasdaq $15,943.25 -0.49%
Name Value % Chg
Sector
Information Technology 1,658.0 +0.45%
Communication Services 1,461.8 -0.31%
Industrials 6,427.7 -0.42%
Energy 10,482.2 -0.44%
Financials 6,238.3 -0.51%
Health Care 37,746.2 -0.56%
Utilities 8,200.8 -0.60%
Consumer Staples 11,545.2 -0.97%
Materials 17,711.6 -1.13%
Consumer Discretionary 2,972.7 -1.26%
Real Estate 2,968.2 -1.34%

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Markets

ASX 200 Session Chart

s&P asx 200 xjo intraday chart 23 Nov 2023
The "gentle" pullback from November's rally is starting to not feel so gentle anymore (Source: Market Index)

The S&P/ASX200 (XJO) finished 53.2 points lower at 6,987.6, smack-bang on its session low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by 112 to 190.

The S&P/ASX All Ordinaries Gold Sub-Index (XGD) +1.0% was easily the best performing sector today, likely in response to firmer spot gold prices on Friday as well as during Asian trade today.

Gold is rallying on a combination of lower long term interest rates and a drop in the US dollar. Add in geopolitical tensions, and you're ticking at least three of the key boxes gold bugs generally use to bolster their "gold is the only legitimate financial asset" argument!

Spot Gold chart
New highs for spot gold are not out of the question

The spot gold chart shows a resumption of the short-and-long term trends, as well as some healthy price action, and candles. If the price of spot gold can push above US$2,010/oz, there's little chart resistance until the all-time highs around US$2,073/oz.

Company

Last Price

Change $

Change %

1-month Perf %

1-year Perf %

Ramelius Resources (RMS)

$1.585

+$0.06

+3.9%

-7.6%

+93.3%

Genesis Minerals (GMD)

$1.760

+$0.065

+3.8%

+20.5%

+45.5%

Tietto Minerals (TIE)

$0.615

+$0.02

+3.4%

+44.7%

-22.6%

Kingsgate Consolidated (KCN)

$1.290

+$0.04

+3.2%

+22.3%

-31.4%

Resolute Mining (RSG)

$0.385

+$0.01

+2.7%

+8.5%

+113.9%

Ora Banda Mining (OBM)

$0.200

+$0.005

+2.6%

+48.1%

+141.0%

West African Resources (WAF)

$0.840

+$0.02

+2.4%

+13.5%

-27.6%

Westgold Resources (WGX)

$2.03

+$0.04

+2.0%

+2.5%

+167.1%

Insert standard pun about gold stocks shining here...

Going the other way, ASX lithium companies. Again! The reason for today's underperformance was a big drop in the price of key lithium minerals in major producer and consumer, China.

lithium carbonate futures
Lithium minerals prices keep falling, and falling, and falling, and...well, you get the message

Guangzhou Futures Exchange ("GFEX") lithium carbonate for January delivery is losing just under 6% at the time of writing, while lithium hydroxide and spodumene concentrate prices are also lower. Looking at the chart above, the trend is definitely not the friend of Aussie lithium bulls.

Company

Last Price

Change $

Change %

1-month Perf %

1-year Perf %

Ioneer (INR)

$0.150

-$0.015

-9.1%

+3.4%

-73.2%

Wildcat Resources (WC8)

$0.850

-$0.065

-7.1%

+7.6%

+2556.3%

Latin Resources (LRS)

$0.185

-$0.01

-5.1%

-27.5%

+60.9%

Core Lithium (CXO)

$0.330

-$0.015

-4.3%

-7.0%

-76.8%

Sayona Mining (SYA)

$0.069

-$0.003

-4.2%

-15.9%

-69.3%

Delta Lithium (DLI)

$0.465

-$0.02

-4.1%

-21.8%

-20.5%

IGO (IGO)

$8.45

-$0.29

-3.3%

-20.7%

-46.4%

Mineral Resources (MIN)

$62.35

-$1.67

-2.6%

+3.2%

-28.3%

Liontown Resources (LTR)

$1.365

-$0.035

-2.5%

-19.2%

-31.1%

Pilbara Minerals (PLS)

$3.55

-$0.09

-2.5%

-9.7%

-27.8%

ASX lithium companies continue to be dragged lower by plummeting lithium minerals prices

Economy

There weren't any major data releases today.

What to watch out for...

Only a couple of interesting data points on the international agenda for this evening: at 1:00am AEDT ECB President Lagarde will be speaking, and then at 2:00am AEDT we'll get data on US New Home Sales.

But, really, everything is going to pale into comparison compared to what I'm calling "Inflation Week". Wednesday sees the release of Australia's Consumer Price Index (CPI), on Thursday it's Europe's turn, and then there's the big one on Friday, the release of the US Core PCE Price Index.

But first, tomorrow at 11:30am AEDT, watch out for Australian retail sales data.



Interesting news and movers

Trading higher

Trading lower

  • -9.1% Ioneer (INR) - Weaker lithium sector as lithium carbonate price plunges ~6% in China

  • -6.3% Autosports Group (ASG) - No news since 24-Nov Chairman and CEO Address

  • -6.1% OM Holdings (OMH) - No news

  • -5.6% Select Harvests (SHV) - No news since 24-Nov FY2023 Results Announcement

  • -5.1% Latin Resources (LRS) - Weaker lithium sector as lithium carbonate price plunges ~6% in China

  • -5.1% Lotus Resources (LOT) - Weaker uranium sector

  • -4.9% Cettire (CTT) - No news

  • -4.3% Core Lithium (CXO) - Weaker lithium sector as lithium carbonate price plunges ~6% in China

  • -4.2% Deep Yellow (DYL) - Weaker uranium sector


Broker notes

  • Appen (APX) retained at hold Bell Potter; Price Target: $0.65 from $1.70

  • Chrysos (C79) initiated buy at Bell Potter; Price Target: $8.70

  • Clover Corp. (CLV) initiated outperform at Taylor Collison; Price Target: $0.95

  • Computershare (CPU) initiated buy at Goldman Sachs; Price Target: $27.00

  • IGO Limited (IGO) upgraded from hold to buy at Bell Potter; Price Target: $11.30

  • Karoon Energy (KAR) initiated overweight at JPMorgan; Price Target: $2.75

  • Lovisa Holdings (LOV) retained at neutral Macquarie; Price Target: $18.50 from $18.70

  • Veem (VEE) retained at add Morgans; Price Target: $1.00 from $0.91


Scans

Top Gainers

Code Company Last % Chg
SHN Sunshine Metals Ltd $0.031 +47.62%
AKM Aspire Mining Ltd $0.08 +23.08%
CPV Clearvue Technolo... $0.64 +23.08%
GCX GCX Metals Ltd $0.051 +21.43%
FGL Frugl Group Ltd $0.012 +20.00%
View all top gainers

Top Fallers

Code Company Last % Chg
WEC White Energy Comp... $0.05 -26.47%
EPX Ep&T Global Ltd $0.018 -25.00%
ELT Elementos Ltd $0.086 -21.82%
MEM Memphasys Ltd $0.011 -21.43%
TG1 Techgen Metals Ltd $0.079 -21.00%
View all top fallers

52 Week Highs

Code Company Last % Chg
SHN Sunshine Metals Ltd $0.031 +47.62%
CPV Clearvue Technolo... $0.64 +23.08%
CAT Catapult Group In... $1.27 +11.89%
NFL Norfolk Metals Ltd $0.41 +7.90%
AND Ansarada Group Ltd $1.59 +6.71%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
WEC White Energy Comp... $0.05 -26.47%
EPX Ep&T Global Ltd $0.018 -25.00%
ELT Elementos Ltd $0.086 -21.82%
SEN Senetas Corporati... $0.015 -16.67%
FAR FAR Ltd $0.365 -16.09%
View all 52 week lows

Near Highs

Code Company Last % Chg
VLUE Vaneck MSCI Inter... $23.94 -0.21%
SEMI Global X Semicond... $12.41 -0.96%
GMG Goodman Group $23.00 -0.30%
BILL Ishares Core Cash... $100.63 +0.03%
WHF Whitefield Indust... $5.00 -3.66%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
PSQ Pacific Smiles Gr... $0.90 -2.17%
RXL ROX Resources Ltd $0.17 -5.56%
APX Appen Ltd $0.615 +2.50%
PAR Paradigm Biopharm... $0.385 +1.32%
BUB Bubs Australia Ltd $0.125 -7.41%
View all RSI oversold

Written By

Carl Capolingua

Content Editor

Carl has over 30-years investing experience and has helped investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.

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