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

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.

Markets

ASX 200 Session Chart

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!

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.

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 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.

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

• +11.9% Catapult Group International (CAT) - No news since 14-Nov 1H FY24 Results MD CEO, CFO Addresses

• +8.3% Imugene (IMU) - No news

• +6.7% Pointerra (3PL) - No news

• +5.9% Macmahon Holdings (MAH) - No news since 21-Nov Euroz Hartleys Industrial Forum Presentation

• +5.4% Weebit Nano (WBT) - Weebit Nano to present at Automic Invest 2023 conference

• +5.4% COG Financial Services (COG) - 2023 AGM CEO Presentation

• +4.8% Liberty Financial Group (LFG) - No news since 21-Nov Change in substantial shareholder notices x 5

• +4.2% Smartpay Holdings (SMP) - FY24 Interim Results Announcement

• +3.9% Ramelius Resources (RMS) - No news since 23-Nov 2023 AGM Chair's address and MD presentation; Stronger gold sector

• +3.8% Genesis Minerals (GMD) - Corporate Presentation - Ready set grow

• +3.7% Adairs (ADH) - No news since 24-Nov AGM Presentation FY23

• +3.4% Tietto Minerals (TIE) - Rejects takeover offer from Zhaojin - Target Statement

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