Closing Bell: Minus Energy, the ASX benchmark and small cap indices had a silly day of depressing trade

 

• ASX 200, Small Ords and Emerging Co’s indices all close -0.8% in the red
  
• Only the Energy Sector finds some green
• Small caps led by teeny-tiny energy minnow CCE
  

The Australian sharemarket dropped on Wednesday, dragged down by miners and information technology companies after a weaker session on Wall Street overnight.

The ASX 200 (XJO) was down 0.8% at the close of trade on Wednesday.

The ASX Small Ordinaries Index (XSO) also ended -0.8% lower, while the ASX Emerging Companies Index (XEC) lost only -0.75%.

All sectors traded in the red.

Except for Energy.

Cut out the other 10 sectors and it really was a terrific day of business. The Energy Gang rose nicely on the back of stonking oil prices, which rose above US$90 a barrel for the first time (in ages, maybe this year, I’ll check with Bevis).

IT stocks ran away. Telco and Industrials gave back the 1.3% they’d made on Monday.

Financials are a total drag.

Also the banking sector was having a tough day of it. Bad form here by the lads (and one or two) lasses at Macquarie Group (ASX:MQG) which has hit reverse on its forward guidance.

Aussie Healthcare companies have also weighed on the ASX, after UBS drew out its big red pen and downgraded Resmed ResMed (ASX:RMD) and blaming it squarely on the enormous success of the Danish drug maker Novo Nordisk and its fat-beating Ozempic weight loss drug family. UBS says the Danes and their wonder drugs could eat into demand for Resmed’s sleep apnoea drugs.

One would think they might eat into company’s like Collins Foods, but what do I know? Resmed was down heavily (around 3% last time I checked).

 

Wednesday’s ASX sectors:

 

Other random but interesting moments on Wednesday include the late mail on Vmoto (ASX:VMT), which is down about 4.5% after the market was unchuffed about its follow-through on a largely forgotten May announcement about acquiring some land in China.

Suddenly, here’s the Aussie electric vehicle company announcing the construction of giant “state-of-the-art” manufacturing facilities on the said recently acquired industrial land in beautiful Lishui Economic Development Zone in Nanjing, China.

Vmoto says it’s now paid a total of RMB13.5 million ($2.9 million) from VMT’s existing cash reserves, while construction of the new 32,856 m2 site at a cost of some $14 million is to be funded progressively via cash and debt, with completion scheduled for September 2024.

People don’t like change. For my bit – on completion, Vmoto says its manufacturing footprint will go from from 30,121m2 to 62,977m2, doubling production capacity from circa 150,000 units p.a to as much as 300,000 units p.a.

Even better, the V-moto-version of a gigafactory is not only located close to Vmoto’s existing manufacturing base in Nanjing – which is expected to create synergies, economies of scale and materially increased capacity to meet rising demand for VMT’s product – but Nanjing’s a port and places like India are buying up a lot of bikes. EV bikes.

As the ASX pulled stumps, US Futures were incredibly, preternaturally in a state of pure equivocation – except the Nasdaq, which was down almost -0.2% ahead of the New York open.

 

 

RIPPED FROM THE HEADLINES

The Aussie economy grew by 0.4% over the June quarter, to be 2.1% higher through the year, the ABS has reported today.

‘GDP per capita’, however, fell by 0.3%. And it did so for the third consecutive quarter. A strange reading I haven’t paid any attention to, but which (I guess) implies the country’s going forward, but individually we’re almost in recession.

For the 2022‑23 financial year, Aussie GDP grew by 3.4%

“This was the seventh straight rise in quarterly GDP, and annual growth remained above trend, reflecting the absence of significant COVID-19 disruptions, such as lockdowns, in 2022-23,” Katherine Keenan, ABS head of national accounts said.

“Capital investment and exports of services were the main drivers of GDP growth this quarter.”

The news came after another Swiss-led global financial organisation waved its ego around – this time at the G20 minus Xi Jinping – in New Dehli.

Making the most of his permanent invite to the slick ones annual meet, Klaas Knot (real name unknown), chair of the Basel-based Financial Stability Board (FSB), told gathered ingrates that the world and its fragile economies can expect “further challenges and shocks” in the months ahead.

“The global economic recovery is losing momentum and the effects of the rise in interest rates in major economies are increasingly being felt… There will certainly be further challenges and shocks facing the global financial system in the months and years to come,” Klass said, before diving into the end of days around high interest rates scuppering economic recoveries and the imminent collapse of global real estate etc.

Which is probably why Federal Treasurer Jim Chalmers was so chuffed with the GDP drop.got he called ‘steady and sturdy’.

“The National Accounts show the Australian economy remaining sturdy in the face of unrelenting pressure.

“Economic growth held up relatively well in the June quarter, despite the inevitable toll of high interest rates, high but moderating inflation and continuing global uncertainty, including the slowdown in China.

“We know there are challenges ahead, but we face them from a position of relative strength. This is a steady result, but we know that households are under pressure from the rising cost of living and higher interest rates.”

 

 

TODAY’S ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks:

Swipe or scroll to reveal full table. Click headings to sort:

Absolute energy minnow Carnegie Clean Energy (ASX:CCE), has jumped on news that it’s inked a juicy contract with Ireland that will see its CETO wave energy tech installed there by mid-2025.

CCE says that its CETO Wave Energy Ireland (CWEI) subsidiary has been awarded a €3.75 million contract to build and operate a CETO wave energy converter at the Biscay Marine Energy Platform in the Basque Country, Spain and will deliver power to the grid.

The Consumer Cyclical company Live Verdure (ASX:LV1), has snagged commitments for a $1.68 million placement from new and existing sophisticated shareholders.

The funds raised will be used for “new product development, fund working capital requirements for large retail partnerships and to further accelerate the Company’s growth through investment in sales, marketing, and inventory initiatives,” LV1 says.

Here’s a pic. You can see they zig zagged a little before going right up and then down and then a bit more down and then mainly across and up.

Elsewhere, Boadicea Resources (ASX:BOA) has climbed on no news while a number of other goldies including Austral Gold (ASX:AGD) and Gold 50 (ASX:G50) are showing significant jumps as well, gold always being fun to watch.

 

TODAY’S ASX SMALL CAP LAGGARDS

Here are the best performing ASX small cap stocks:

Swipe or scroll to reveal full table. Click headings to sort:

 

TRADING HALTS

Matsa Resources (ASX:MAT) – Pending an announcement in relation to a Feasibility Study for the Devon Joint Venture project.

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