Australia trade surplus hits record high, Chalice Mining soars on discovery: ASX up 0.2% at noon

Market Reports

by Melissa Darmawan

Australian stocks have rebounded, helped by Chalice Mining’s latest discovery, which has helped to lift the material sector. Gains in consumer staples and discretionary stocks have offset losses in information technology, while weakness in energy stocks has continued. Investors learnt that the oil price entered a technical bear market as the price continued to slip from US$100 a barrel before clawing back some of its losses.

At noon, the S&P/ASX 200 is 0.2 per cent or 12 points higher at 6,606. The SPI futures are pointing to a rise of 3 points.

A new sulphide zone has been intersected during initial drilling at Chalice Mining’s (ASX:CHN) Dampier Target. Spot measurements have confirmed the presence of nickel and copper mineralisation, with the news sending the company's share price higher by 8.3 per cent to $4.06, to make it the best performer on the ASX 200.

Meanwhile, the second-best performer on the ASX 200 is Link Administration Holdings (ASX:LNK). Canadian group Dye & Durham has increased its offer for Link to $4.57 per share after Link rejected a revised $4.30 per share lower bid. Link investors could receive an additional 13 cents from the sale under the proposed offer. Shares are trading 6 per cent higher to $4.06.

Technology companies have returned their gains after yesterday’s bounce, with EML Payments (ASX:EML) and Zip Co (ASX:ZIP) the two worst performers on the ASX 200. They tumbled up to 9 per cent each. Lynas Rare Earths (ASX:LYC) has taken a fall, down 6.2 per cent amid weakness in the underlying commodity prices.

National Australia Bank (ASX:NAB) is down 0.8 per cent to $27.93, leading the major banks lower. However, Macquarie Group (ASX:MQG) is bucking the trend, up 0.5 per cent to $170.45.

Despite the market rebound, investors remain cautious that it could be short-lived. One of the concerns weighing on investor's minds is that results from the upcoming earnings season could spark further volatility.

Local economic news

Strong exports of coal and other mining materials helped the nation post a record $15.96 billion trade surplus in May. The result came in stronger than expected with a trade surplus of $10.27 billion. The seasonally adjusted balance on goods and services surplus was up $2.71 billion from April with exports gaining $5.05 billion to $58.4 billion, attributed to the growth in exports of coal, coke and briquettes and other mineral fuels. Imports rose 5.8 per cent to $42.44 billion on demand for fuels and lubricants and non-industrial transport equipment, according to the Australian Bureau of Statistics (ABS).

Payroll jobs rose 0.1 per cent in June from the month before. The latest monthly increase of 0.1 per cent compared with a 0.4 per cent fall a year earlier, during Victoria’s fourth lockdown during late May and mid-June 2021, according to the ABS.

The Australian Industry Group Australian Performance of Services Index dipped to 48.8 in June from 49.2 in May. This is the second straight month of contraction in the services sector.

Company news

Bendigo and Adelaide Bank (ASX:BEN) is on track to grow its margin lending book after inking a deal with ANZ investment lending portfolio to buy Leveraged Equities. The portfolio is worth around $715 million and has 11,900 customer facilities which is expected to lift Bendigo's margin lending portfolio to more than $2 billion. Shares in Bendigo and Adelaide Bank (ASX:BEN) are trading 0.3 per cent lower to $9.24 and shares in ANZ Bank (ASX:ANZ) are flat at $22.40.

Drone connectivity expert Elsight (ASX:ELS) has signed a deal with Brazilian-based company Speedbird Aero. Speedbird has built a drone that can deliver packages for commercial, industrial, and healthcare uses. Shares are trading 4.1 per cent higher at 38 cents.

The US FDA has awarded Kazia Therapeutics (ASX:KZA) a designation for its treatment for rare brain cancer in children. The designation means that the clinical trial sponsor could be up to receive a priority review voucher if the drug is initially approved for the target disease. Shares are trading 0.8 per cent higher to 61.5 cents.

Pushpay Holdings (ASX:PPH) has announced that it has welcomed the Archdiocese of Seattle, Washington, US as a Catholic Customer. The Archdiocese of Seattle will be leveraging ParishStaq, the Company’s integrated technology platform to help parishes and dioceses increase engagement and grow their communities. Shares are trading 1.7 per cent higher to $1.18.

AFT Pharmaceuticals (ASX:AFP) and RooLife Group (ASX:RLG) have announced that they have launched a range of AFT’s over the counter pharmaceuticals through their store on the China Cross Border E-Commerce online platform Tmall Global. Further launches are to follow over the next few months. Shares are trading 2.7 per cent higher to $3.24.

Pinnacle Investment Management’s (ASX:PNI) 10 affiliates have crystallised performance fees for the year ended 30 June 2022 totalling around $57.1 million, of which $38.3 million crystallised in the second half of the financial year. Shares are trading 6.1 per cent higher to $8.06.

Monadelphous Group (ASX:MND) has secured new contracts and contract extensions in the resources and infrastructure sectors totalling around $220 million. Shares are trading 0.9 per cent higher to $9.89.

Commodities and the dollar

Gold is trading at US$1,736.90 an ounce.
Iron ore is 1.7 per cent lower at US$112.35 a ton.
Iron ore futures are pointing to a rise of 1.2 per cent.
One Australian dollar is buying 67.84 US cents.

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