ASX down 0.12% at noon as investors await RBA's decision

Market Reports

by Peter Milios

Australia's share market is trading slightly weaker ahead of the Reserve Bank of Australia's decision.

At noon, the S&P/ASX 200 is 0.12 per cent lower at 7,319.90.

This was led by materials, tech, and property sectors, with BHP (ASX:BHP) and WiseTech (ASX:WTC) down by 1.6 per cent and 0.8 per cent respectively.

Discretionary, staples, and communication sectors outperformed, with Wesfarmers (ASX:WES), Woolworths (ASX:WOW), and Telstra (ASX:TLS) up. Megaport (ASX:MP1) shares dived 10 per cent after its CEO resigned.

Invocare had its best day on record, jumping 36 per cent to $12.20, as it evaluates a non-binding $12.65 per share takeover offer from TPG Capital (ASX:TPG), which has bought a 17.8 per cent stake via physical ownership and derivatives.

The SPI futures are pointing to a fall of 14 points.

Best and worst performers

The best-performing sector is Consumer Staples, up 0.66 per cent. The worst-performing sector is Materials, down 0.95 per cent.

The best-performing large cap is Incitec Pivot (ASX:IPL), trading 1.87 per cent higher at $3.53. It is followed by shares in QBE Insurance Group (ASX:QBE) and Aurizon Holdings (ASX:AZJ).

The worst-performing large cap is Whitehaven Coal (ASX:WHC), trading 3.41 per cent lower at $7.08. It is followed by shares in Infratil (ASX:IFT) and South32 (ASX:S32).

Asian markets

Asia-Pacific shares mostly fell on Tuesday as investors await the Reserve Bank of Australia’s rate decision, as well as a slew of economic data across the region.
Japan’s Nikkei 225′s traded slightly below the flatline, while the Topix dipped fractionally. South Korea’s Kospi dropped 0.03 per cent and the Kosdaq slipped 0.1 per cent in its first hour of trade.
The Hang Seng futures was at 20,653, which is higher compared to the Hang Seng index’s last close at 20,603.19.

Waiting Game

Market in waiting mode with several high-profile potential directional drivers over the next couple weeks. These include Powell's semiannual monetary policy testimony on Tuesday and Wednesday, JOLTs report on Wednesday, the February employment report on Friday, February CPI on 14-Mar and the FOMC meeting on 22-Mar. No real change in the market narrative as we wait. Bulls largely focused on soft/no landing scenarios, broader (albeit choppy) disinflation trend, corporate cost cutting efforts, additional margin cushions from easing supply chain constraints and improving labour availability, elevated cash levels and still below average positioning, recent technical hold, and accelerated China reopening. Bears focused on sticky, demand-driven inflation and upside risk to peak rates, recession signalling from deep curve inversion, potential Fed policy mistake, earnings/margin risk, negative flow and liquidity dynamics, relative valuation, geopolitical risks and traction behind TARA/TAPAS/TIARA (vs TINA) investing narratives.

Company news

DroneShield (ASX:DRO) has successfully completed its Share Purchase Plan (SPP) after raising $29.4 million from its existing shareholders at an issue price of $0.30 per share. In response, Oleg Vornik, DroneShield’s CEO, commented, “The funds will allow us to take advantage of the highly favourable environment for defence and specifically customer demand for counterdrone solutions, as we target 2023 to be a transformative year for DroneShield.” Shares are trading 9.3 per cent lower at 34 cents at noon.

Emerging lithium producer Sayona Mining Limited (ASX:SYA) has entered into a subscription agreement with PearTree Securities Inc, for a A$54.9 million flow through shares (FTS) placement to advance Sayona’s Québec lithium projects. The FTS represents a 34 per cent premium to Sayona’s last closing price. Under the structure, accredited Canadian investors can get tax deductions and credits generated for specified mining investments. Sayona’s Managing Director, Brett Lynch commented: “This funding will provide an added boost to our expansion plans, with the FTS provisions allowing us to raise capital at a premium to the current share price, thereby minimising dilution for the benefit of our shareholders.” Shares are trading 5.3 per cent higher at 24.8 cents at noon.

Pentanet Limited (ASX:5GG) announced the signing of a Collaboration Agreement with Optus Mobile to deliver cloud gaming service to Optus customers. Optus Managing Director of Marketing and Revenue Matt Williams: “Our mission is to break down the barriers to gaming and offer our customers the freedom to play anywhere and anytime. Shares are trading 39.4 per cent higher at 23 cents at noon.

Metro Mining Limited (ASX:MMI) announces it is remobilising the production and services team back to site from next week and has announced a MOU for additional offtake. The target for mining start is 24 March with ship-loading due to commence on 2 April, one or two weeks earlier than normal, whilst the Company has agreed offtake agreements for up to 5 Million tonnes for 2023. Shares are trading 12.5 per cent higher at 0.9 cents at noon.

Commodities and the dollar

Gold is trading at US$1782.70 an ounce.
Iron ore is 1.6 per cent lower at US$125.35 a tonne.
Iron ore futures are pointing to a 0.27 per cent rise.
One Australian dollar is buying 67.27 US cents.

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