Home / Daily Market Update / ASX claws back $33b as miners and banks rebound

ASX claws back $33b as miners and banks rebound

Daily Market Update

Strongest day in four months, Fed backs off, lithium miners rally

The ASX 200 (ASX: XJO) experienced its best session in four months, adding 1.5% on Tuesday, all but erasing Monday’s losses.

Every sector but healthcare finished higher, with real estate and energy the biggest beneficiaries adding 2.2% respectively.

  • The positive sentiment came from Fed Chair Jerome Powell’s written testimony confirming his confidence that inflation would fall below 2% once ‘transitory supply effects abate’.

    Property was among the biggest beneficiaries with Charter Hall Group (ASX: CHC) up 3.4% and Vicinity Centres (ASX: VCX) 2.9% even as tax changes impact valuations.

    Yesterday VCX reported a 1.2% fall in its property valuations, primarily in CBDs, in order to price in the recent Victorian Government land tax and stamp duty changes as well as continued rent deferrals.

    On the positive side, management announced a 6.6 cent distribution, nearing the 8 cents paid in 2020 as operations continue to return to normal.

    Another one bites the dust, IGO gets approval, Nuix hits record low

    IGO Ltd (ASX: IGO) and Pilbara Minerals Ltd (ASX: PLS), both lithium miners, jumped 7.4% and 6.2% respectively after the former received approval to finalise its joint venture with its Chinese partner.

    Another listed investment company is set to disappear from the ASX boards as the inefficiencies of the structure remain in question.

    Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is set to merge with Milton Corporation Limited (ASX: MLT) at a price of $6 per share. MLT shares jumped 14% to $5.80 on the news.

    The deal will create a $10 billion investment company, with MLT shareholders receiving an 8 cent final dividend, a special dividend of up to 37 cents per share, and a 7 cent dividend from SOL.

    The combined entity is expected to use its larger balance sheet and the greater flexibility that comes without the LIC mandate structure to finalise a number of deals to purchase alternative assets, says management.

    Shares in Nuix Ltd (ASX: NXL) hit a new record low after it was announced that the Australian Federal Police would review the payout of options to a previous shareholder for ‘potential breaches of the Corps Act’.

    US rallies on Powell testimony, Microsoft hits US$2 trillion, Bitcoin tumbles

    US markets continued their sharp recovery with all three indices higher, led by the Nasdaq which was up 0.8%.

    The S&P 500 and Dow Jones added 0.5% and 0.2% respectively, with retailers, energy, and technology stocks leading the gains.

    Microsoft Corporation (NYSE: MSFT) was a key contributor, adding 1.1%, which sent the market cap past US$2 trillion for the first time, joining Apple Inc (NASDAQ: AAPL) as the only companies to do so.

    Despite the lofty valuation, the company trades on a price-earnings multiple of around 30 times and has a massive amount of cash on the balance sheet.

    The home price spike hasn’t been limited to Australia, with the US reporting a 23% annual increase in May despite a lower volume of properties being sold.

    The dream 2021 run for cryptocurrencies continues to crater with Bitcoin falling below US$30,000 for the first time this year, cancelling out the 100% gains achieved by many.

    The falls are widespread and come following an announcement by the Chinese Government that they would be seeking to ban Bitcoin mining but also restrict the likes of Alibaba Group (NYSE: BABA) from allowing customers to trade crypto on their platforms.

    Industrials, property push ASX lower, RBA hikes again, Woolworths guides to higher sales

    The local market fell sharply on the back of an unexpected 0.25 per cent interest rate increase by the Reserve Bank of Australia. The news took the cash rate to 3.85 per cent, adding more pressure to household balance sheets and came despite most experts suggesting hikes had come to an end. The hardest hit…

    Drew Meredith | 3rd May 2023 | More
    ASX boosted by the energy sector, Origin upgrades outlook, Best & Less gets a bid

    The local sharemarket finished 0.4 per cent higher on Monday, buoyed by the energy and utilities sectors, which gained 1.3 and 1 per cent, despite the oil price continuing to fall. The sector was buoyed by an earnings upgrade from Origin Energy (ASX:ORG) which sent shares 0.5 per cent higher with AGL Energy (ASX:AGL) also…

    Drew Meredith | 2nd May 2023 | More
    Upbeat start to week – and month – likely for Aussie market

    After a strong session for global markets on Friday, Australian shares will take a positive lead into the new week – and month. The Australian benchmark index, the S&P/ASX 200, added 16.5 points, or 0.2 per cent, on Friday, to 7,309.2, but eased 53 points, or 0.7 per cent over the week. ASX futures trading…

    James Dunn | 1st May 2023 | More