Gains from materials and healthcare boost ASX 0.71% at noon

At noon, the S&P/ASX 200 is 0.71 per cent higher at 7,172.90, with materials and healthcare sectors leading the gains.

Syrah Resources (ASX:SYR), Block (ASX:SQ2), and De Grey Mining (ASX:DEG) were among the best performers, with HMC Capital (ASX:HMC) and Harvey Norman (ASX:HVN) being the worst performers. BHP Group (ASX:BHP) shares rose 1.7 per cent to $46.86.

The SPI futures are pointing to a rise of 57 points.

Best and worst performers

The best-performing sector is Materials, up 1.48 per cent. The worst-performing sector is Energy, down 0.43 per cent.

The best-performing large cap is Evolution Mining (ASX:EVN), trading 3.96 per cent higher at $3.15. It is followed by shares in Northern Star Resources (ASX:NST) and Fortescue Metals Group (ASX:FMG).

The worst-performing large cap is Whitehaven Coal (ASX:WHC), trading 0.75 per cent lower at $6.62. It is followed by shares in Woodside Energy Group (ASX:WDS) and Liontown Resources (ASX:LTR).

Resilient stocks

S&P higher in six of the last eight sessions, back above the 4,000 level and above levels seen just before the start of the banking sector turmoil. In addition, Nasdaq is in a bull market for the first time in nearly three years. Equity market resilience chalked up to a number of factors, including the Fed/Treasury/FDIC response to the banking turmoil. Other tailwinds include big tech leadership, positioning, improving technicals, growth upgrades, continued signs of consumer resilience, early Q1 earnings read-throughs and expectations for renewed disinflation momentum. Fed pivot expectations and balance sheet re-expansion among the more popular bullish talking points. However, the former plays into heightened concerns about a credit crunch and additional collateral damage from the aggressive tightening cycle, while the latter is dismissed as renewed QE. Higher-for-longer Fed is still a key component of the bearish narrative (market has been wrong on every pivot prediction during the current tightening cycle),along with the 10-20 per cent downside risk to consensus earnings estimates as negative operating leverage drives further margin reversion.

Sentiment and positioning still depressed

AAII bull-bear spread only saw a slight improvement to -23.1 in week-ended 29-Mar from -28.0 in the prior week. Bull-bear spread at an unusually low level for the sixth consecutive week and for the 48th time in the past 64 weeks (AAII). Depressed sentiment and positioning one of the go-to explanations for the bounce in risk assets following the recent banking sector turmoil. Some thoughts this dynamic remains best evidenced by the flood of cash into money market funds. In addition, Goldman Sachs recently pointed out that CTAs have sold ~$150B of equities in the last few months and are now nearly $30B short the S&P. Morgan Stanley noted that CFTC data out last Friday showed a -$40B or -3.4z change in SPX positioning aggregated across all buyside manager types (The Market Ear). Added that this leaves SPX buy side positioning now short for the first time since the middle of last November. JPMorgan noted that after a brief hiatus, LO buyers returned to mega cap tech on Wednesday. Also said flows in the beleaguered banking sector have skewed better to buy in the money centre and larger cap regional names.

Company news

NOVONIX (NASDAQ:NVX, ASX:NVX) announced that it has agreed to establish a joint venture with TAQAT to develop and produce anode materials for electric vehicle and energy storage system batteries in the Middle East and North Africa. Chris Burns, CEO of NOVONIX commented, “We believe the joint venture will enhance our financial strength and profitability by both driving revenues and accessing cost competitive, quality feedstock for projects outside of North America.” Shares are trading 14.2 per cent higher at $1.33.

Immutep Limited (ASX: IMM; NASDAQ: IMMP) announced yesterday the expansion of their triple combination therapy in 1st line non-small cell lung cancer. Prof. Dr. Salah-Eddin Al-Batran of the Institute of Clinical Cancer Research IKF and lead investigator noted: “We’re thrilled to expand the trial population for this triple combination therapy, which has demonstrated promising efficacy and safety in 1st line non-small cell lung cancer patients.” Immutep CEO, Marc Voigt, said: “We are grateful for the long-standing support of Dr. Al-Batran and the entire team at IKF. Our valuable relationship with this world-class institution has uncovered many positive attributes of efti and continues to help us cost-effectively advance this novel immunotherapy for patients with advanced solid tumours, including 1st line non-small cell lung cancer.” Shares are trading 3.8 per cent lower at 26 cents.

Sayona (ASX:SYA) and Piedmont Lithium have announced the successful restart of the NAL project in Quebec. The restart was completed on time and on budget Piedmont’s President and CEO Keith Phillips added, “This marks an exciting milestone not only for Piedmont Lithium and Sayona Mining, but the North American market for which we are working to supply critical lithium resources.” Shares are trading 3.7 per cent higher at 21.3 cents.

Commodities and the dollar

Gold is trading at US$1782.70 an ounce.
Iron ore is 2.3 per cent higher at US$128.00 a tonne.
Iron ore futures are pointing to a 1.39 per cent rise.
One Australian dollar is buying 67.19 US cents.