by Lauren Hayes
The Australian market has followed the negative lead from Wall Street overnight which saw US markets snapping their three-day rally, as investors digested the incoming results of the US midterm elections and crypto turmoil continued. Crypto platform Binance has pulled out of the FTX rescue deal, following a review of its books and triggering a slide in the crypto market.
In economic news, China’s annualised producer prices fell for the first time in October since December 2020.
The standout today is Origin Energy (ASX:ORG) trading 34.94 per cent higher at $7.84 after receiving a non-binding, indicative offer at $9.00 per share.
At noon, the S&P/ASX 200 is 0.33 per cent or 23.40 points lower at 6,975.90.
The SPI futures are pointing to a fall of 23 points or 0.33 per cent.
Best and worst performers
The best-performing sector is Utilities, up 13.22 per cent. The worst-performing sector is Energy, down 2.03 per cent.
The best-performing stock in the S&P/ASX 200 is Origin Energy (ASX:ORG), trading 34.94 per cent higher at $7.84. It is followed by shares in News Corporation (ASX:NWS) and Perpetual (ASX:PPT).
The worst-performing stock in the S&P/ASX 200 is Xero (ASX:XRO), trading 10.08 per cent lower at $65.30. It is followed by shares in Pendal Group (ASX:PDL) and Block (ASX:SQ2).
Asian news
Asia-Pacific stocks are trading mixed this morning with the Hang Seng index in Hong Kong down 1.62 per cent. In mainland China, the Shanghai Composite has shed 0.53 per cent while the Shenzhen Component was 0.79 per cent lower. The Chinese yuan has weakened past 7.25-levels against the US dollar after its latest economic data release.
The Nikkei 225 in Japan is down 1.14 per cent, while the Kospi in South Korea is trading flat.
Down day
There is no specific data behind the market pullback. This pullback comes after a three-day rally, in which the market seemingly focused on some of the improvement at the margin surrounding a number of key themes. Also, there is some focus on the lack of a “red wave” at the midterms (though results are still on track for the divided government outcome that has the best tailwind for stocks) and disappointing earnings. There are spillover concerns from today’s crypto meltdown, which is also in focus amid the latest updates, including a report that Binance is walking away from the FTX deal. Disney is the latest high-profile name to attract scrutiny, while there is macro uncertainty that continues to come from a wide range of companies. In addition, the CPI data waiting game may cause further overhang for companies, given the fact that inflation prints are expected to come in hotter. While there may be some (dovish) longer-term implications for monetary policy, labour, auto and housing market headlines are more downbeat. Elsewhere, crypto upheaval puts some renewed attention on broader liquidity issues, and China’s zero Covid pivot headlines have lost some traction, whilst today’s headlines have largely revolved around measures in response to a ramp up in cases.
Company news
Invictus Energy (ASX:IVZ) provided an update on the Mukuyu-1 well that is currently being drilled in its 80 per cent owned SG 4571 licence in Zimbabwe’s Cabora Bassa Basin. The update shows elevated mud gas readings, fluorescence in the cuttings, elevated LWD resistivity and increasing background gas with depth. Commenting on the news, Managing Director Scott Macmillan, stated: “Early indications in our Upper Angwa primary target are highly encouraging and have proven a conventional working hydrocarbon system in the Cabora Bassa Basin, which is an exciting development validating our subsurface model.” Shares are trading 119 per cent higher at 23 cents.
OD6 Metals (ASX:OD6) announced their initial assay results from the recently completed drilling campaign at its Splinter Rock Project northeast of Esperance in Western Australia. Splinter Rock contains widespread, thick clay hosted rare earth element (REE) mineralisation. Some highlights included, outstanding assay results returned from initial 65 holes of the completed 179-hole program and high-grade clay-hosted rare earths confirmed, with large thicknesses over extensive areas. In response, Brett Hazelden, Managing Director, commented: “The extent and consistency of these shallow, high-grade clays have resulted in four significant prospects being identified that are between four and seven kilometres in width which are open in length, on our 2,579km2 Splinter Rock project.” Shares are trading 45 per cent higher at 34 cents.
Predictive Discovery (ASX:PDI) provided an update on assay results from 51 holes for 10,122m of infill and grade control drilling at the Bankan Gold Project. The New diamond drill results produced significant wide and/or high-grade intercepts within NE Bankan’s US$1,800/oz optimised resource pit shell. Commenting on the results, Managing Director Andrew Pardey, said: “These results are from within the optimised resource pit shell and are aimed at providing further certainty of the tonnes and grade ahead of ultimately building and mining the NE Bankan deposit.” Shares are trading 2.8 per cent higher at 19 cents.
Tamboran Resources (ASX:TBN) have today provided an operational update on the Amungee 2H (A2H) development well. Tamboran will drill the vertical and build section to a depth of approximately 2,450-metres, prior to drilling the 1,000-metre horizontal section within the primary target of the Mid-Velkerri “B” Shale. Managing Director and CEO, Joel Riddle, said: “The drilling of the well and the fracture stimulation design will incorporate significant learnings from the recently drilled Maverick 1V well in Tamboran’s operated EP 136 permit, where the vertical section was drilled in 18.3 days, a record for a well in the Beetaloo with a true vertical depth of more than 2,500 metres.” Shares are trading 2.6 per cent higher at 20 cents.
Commodities and the dollar
Gold is trading at US$1706.74 an ounce.
Iron ore is 0.6 per cent higher at US$89.55 a tonne.
Iron ore futures are pointing to a fall of 1.2 per cent.
One Australian dollar is buying 64.34 US cents.
