Rough start to the week, all sectors in the red: ASX down 1.4 per cent at noon

Market Reports

by Lauren Hayes

It was always going to be a dismal start to the trading week following Wall Street tumbling on Friday, after a stronger-than-expected jobs report raised the likelihood of more aggressive tightening by the Federal Reserve. At noon the S&P/ASX 200 is 1.40 per cent or 94.70 points lower at 6668.10.

The SPI futures are pointing to a fall of 98 points.

Best and worst performers

All 11 sectors are trading in the red. The sector with the fewest losses is Consumer Staples, down 0.22 per cent. The worst-performing sector is Utilities, down 2.16 per cent.

The best-performing stock in the S&P/ASX 200 is Iluka Resources (ASX:ILU), trading 1.61 per cent higher at $9.48. It is followed by shares in Sims (ASX:SGM) and Fortescue Metals Group (ASX:FMG).

The worst-performing stock in the S&P/ASX 200 is Johns Lyng Group (ASX:JLG), trading 9.53 per cent lower at $5.98. It is followed by shares in Capricorn Metals (ASX:CMM) and St Barbara (ASX:SBM).

Asian Markets

Today markets in Japan, South Korea, Taiwan and Malaysia are closed for holidays.

Mainland China markets will return to trade this morning after the Golden Week holiday.

Some positive signs on supply chains 

Bloomberg discussed evidence of clearing the backlog in container ships off major ports. The article cited the latest Logistics Managers' Index remark that the outlook hints at normalisation and a return to business as usual over the next year. Sea-Intelligence noted in a report last week that about half of the shipping congestion has been resolved, and by one measure, "a full reversal to normality should come in March 2023”. Bloomberg analysis concurred with estimates showing conditions cooling from the pressures that were flashing red at the start of this year. New York Fed's Global Supply Chain Pressure Index fell for the fifth straight month in September. Similarly, Nikkei's measure indicated easing supply shortages in key sectors such as digital cameras, gaming consoles and air conditioners in Q4. Autos and construction continued to see some shortages, though conditions were better than in Q1.

Dash for cash, exodus from bonds, but no signs of capitulation in equities

Latest Flow Show report from BofA noted a nearly $90 billion inflow to cash in the week-ended 5 October, the most since April 2020, around the height of pandemic fears. While IG drove the biggest bond outflows in four months, there’s still no sign of the meaningful capitulation in equities that some of the bearish strategists have flagged as needed for a credible rebound. It is worthwhile pointing out that while active funds have seen $43.2 billion of outflows over the past four weeks, this has been slightly more offset by $45.9 billion of inflows to equity ETFs. In addition, inflows to US equities are still running just below $140 billion on a year-to-date basis. Last week, Barclays pointed out that only 0.3 per cent of the inflows over the past two years have been reversed vs 2.6 per cent on average in past recessions.

Company News

icetana Limited (ASX:ICE) a global software company providing artificial intelligence solutions to detect real-time anomalous events, announced today it has entered into a binding placement agreement for an investment from Macnica Inc., a subsidiary of Macnica Holdings, Inc. The US$500k (A$771k) investment is for new fully paid ordinary shares. Funds will be used to accelerate icetana’s commercialisation activities and increasing global sales channels utilising Manica’s very strong global distribution platform for the Company’s motion intelligence software. The new investment was made at 2.7 cents representing a small discount of 10 per cent to the 15 trading day volume weighted average price of 3.0 cents. Chief Executive Officer Matt Macfarlane commented “We have enjoyed an excellent relationship with the team from Macnica who have been deeply engaged in our product journey as well as actively positioning us in the crucial Japanese surveillance market. This investment underlines our commitment to expand beyond Japan with Macnica and deepens the ties between our two companies”. Shares are trading up 6 per cent to 4 cents.

Helix Resources Limited (ASX:HLX) provided an update this morning on the ongoing copper exploration drilling at its Canbelego Joint Venture Project located in the Cobar region of NSW. The Company has received assays for two further diamond drill holes and one RC hole within the Canbelego Main Lode project area. Commenting on the latest drill results, Helix Managing Director Mike Rosenstreich said “We are excited to deliver high-grade copper results from our advanced Canbelego Main Lode project featuring two to nearly five percent copper assays. Results also included the highest-grade intercept to date in the upper 150 metres of the Main Lode, confirming the potential for high-grade copper mineralisation at shallower depths. These results are significant because they are extending known high-grade shoots, and with new higher grades from infill drilling, both aspects potentially adding copper tonnes”. Shares are unchanged at 1 cent.

Actinogen Medical (ASX:ACW) announced positive Phase 2a clinical data from its Alzheimer’s Disease (AD) biomarker study, which validates the Company’s Xanamem program. In response to the news, Professor Paul Rolan, Actinogen’s Chief Medical Officer, said “These clinical results provide further validation of our Alzheimer’s Disease program and are a significant step forward in the development of Xanamem as a new treatment for Alzheimer’s Disease with a novel, amyloid- independent mechanism of action”. Shares are trading 27 per cent higher to 12 cents.

Galileo Mining Ltd (ASX:GAL) today provided an exploration update from ongoing RC drilling north of the Callisto palladium platinum-gold-rhodium-nickel-copper discovery within the Company’s 100 per cent owned Norseman project in Western Australia. Galileo’s MD Brad Underwood commented “RC drilling north of Callisto has identified a new zone of disseminated nickel sulphide in the first exploration drill program in the area since the discovery at Callisto defined the prospective geological unit on Galileo’s ground. Our target generation model suggested that the five kilometres north of Callisto are the most prospective and these early drill results strongly support this concept”. Shares are trading up 17 per cent to $1.40.

Knosys Limited (ASX:KNO) a global software-as-a-service (SaaS) information technology company offering a range of software solutions designed to boost productivity, collaboration, and connectivity in the digital workplace, announced this morning that the ANZ Bank has signed a 3 year contract extension for the continued use of Knosys’ Knowledge Management solution, KnowledgeIQ. The value of the contract over the 3 years is expected to exceed $5 million. In addition, ANZ Bank has committed to a series of upgrades to the latest release of KnowledgeIQ to benefit from its new features. Knosys Managing Director, John Thompson, said “This contract extension reflects the confidence that ANZ has in our capacity to deliver a superior Knowledge Management solution. We are seeing more clients in government agencies and financial services, becoming increasingly focused on employee and customer engagement. Our solutions support these initiatives by enabling employees and customers to find relevant information more quickly, either through call centres or through digital channels such as websites and chatbots. KnowledgeIQ enables organisations to deliver consistent and accurate information by being a single source of truth”. Shares are trading up 6 per cent to 9 cents.

Commodities and the dollar

Gold is trading at US$1695.69 an ounce.
One Australian dollar is buying 63.61 US cents.

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