Oil stocks lead weaker markets: Australia set to be lithium leader

 

US stocks fell on Wednesday as Wall Street failed to hold on to the sharp gains from the last two sessions. Investors are now wondering whether the market has become too optimistic about the potential for a central bank policy pivot, especially as recent Fedspeak has not deviated from raise-and-hold/higher-for-longer messaging.

Overnight yields rose sharply, with the rate on the benchmark 10-year Treasury climbing to 3.74 per cent after briefly dipping below 3.6 per cent in the previous session. That put pressure on stocks for much of the day. Volatility in the 10 year treasury market has also reached the highest level since the coronavirus-induced ructions of 2020.

The Dow Jones Industrial Average fell 42.45 points, or 0.14 per cent, to 30,273.87. Earlier in the day, it was down 429.88 points. The S&P 500 lost 0.20 per cent to close at 3,783.28, and the Nasdaq Composite slid 0.25 per cent to 11,148.64.

Third quarter earnings season is not too far away and it’s definitely in the market psychology that the Q2 earnings season helped to stabilise the markets. Right now there’s this hope that the earnings season can stabilise the market and maybe come to the rescue again, the way that it did last quarter.

Energy stocks led the sectors on a good day for crude – Saudi Arabia and Russia, acting as leaders of the OPEC Plus energy cartel, agreed on Wednesday to their biggest production cuts in more than two years in a bid to raise prices, countering efforts by the United States and Europe to choke off the enormous revenue that Moscow reaps from the sale of crude. REITs and utilities came under pressure on renewed rate backup.

In company news, Brazilian mining company Vale is in discussions to sell a $2.5bn minority stake in its metals business, as it seeks to boost its copper and nickel output to meet growing demand for the energy transition. Trading houses in Japan, sovereign wealth funds in the Middle East and car companies are examining the asset. Tesla this year signed an offtake agreement with Vale for nickel from Canada, a sign of how the carmaker is working to secure raw materials supply chains outside China.

Currencies

The dollar index was up 1.0 per cent with some of the best gains coming on the sterling cross

One Australian dollar has weakened slightly compared to the US dollar yesterday, buying 64.99 US cents  (Wed: 65.06 US cents), 57.41 Pence Sterling, 93.98 Yen and 65.76 Euro cents.

Commodities

Australia is expected to grab about 20 per cent of the world's lithium hydroxide refining capacity within five years considering several companies are building refineries in Australia which would turn locally mined lithium ore into battery-grade chemicals. Australia is the world's largest producer of the raw form of the metal which is vital to the EV industry, supplying just under half of global demand.

Gold lost $4.20 or 0.2 per cent to US$1726 an ounce.

Silver fell $0.39 or 1.8 per cent to US$20.71 an ounce.

Copper gained $5.60 or 1.6 per cent to US$354.60 a pound.

Oil added $1.46 or 1.7 per cent to US$87.98 a barrel.

Futures

The SPI futures are pointing to a 0.4 per cent fall.

Figures around the globe

Across the Atlantic, European markets closed lower. Paris fell 0.9 per cent, Frankfurt lost 1.2 per cent while London’s FTSE closed 0.5 per cent lower..

In Asian markets, Tokyo’s Nikkei gained 0.5 per cent, Hong Kong’s Hang Seng jumped 5.9 per cent while China’s Shanghai Composite was closed.

Yesterday, the Australian sharemarket gained 1.7 per cent to close at 6816.

Ex-dividends

Austin Engineering (ASX:ANG) is paying 0.3 cents fully franked
ARB Corporation (ASX:ARB) is paying 32 cents fully franked
Bisalloy Steel (ASX:BIS) is paying 9 cents fully franked
N1 Holdings (ASX:N1H) is paying 0.23 cents unfranked
Qualitas Real Estate Income Fund (ASX:QRI) is paying 0.9004 cents unfranked
Webcentral (ASX:WCG) is paying 0.5 cents 20 per cent franked

Dividends payable

Big River Industries (ASX:BRI)
Breville Group (ASX:BRG)
Costa Group Holdings (ASX:CGC)
Eureka Group Holdings (ASX:EGH)
Fletcher Building (ASX:FBU)
Generation Development Group (ASX:GDG)
InvoCare (ASX:IVC)
Lifestyle Communities (ASX:LIC)
Money3 Corp (ASX:MNY)
Pact Group Holdings (ASX:PGH)
QANTM Intellectual Property (ASX:QIP)
Servcorp (ASX:SRV)
Wesfarmers (ASX:WES)
Woodside Energy Group (ASX:WDS)

IPO

There is one company set to make its debut on the ASX today. Keep an eye out for Bridge SaaS (ASX:BGE) after raising $4.5 milion at 20 cents per share.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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Source: Finance News Network