by Peter Milios
The ASX has increased 0.58 per cent at noon, as Wall Street gained following Federal Reserve Chairman Jerome Powell’s comments that financial conditions have tightened. The Fed’s policy committee raised the central bank’s key rate by 0.25 per cent as expected.
DroneShield (ASX:DRO), a drone detection and security software company, is seeking to capitalise on investor interest by offering new shares via stockbrokers Peloton Capital and Bell Potter, with a raising worth $9 million to $11 million. The new shares are for sale at 30 cents each, with funds raised to be used to build inventory and increase its engineering and sales teams. The stock went into a trading halt as the brokers launched the deal and is set to resume trading on Monday, with the deal valuing the company at $146.3 million based on post-completion market capitalisation.
At noon, the S&P/ASX 200 is 0.58 per cent higher at 7,545.
The SPI futures are pointing to a rise of 38 points.
Best and worst performers
The best-performing sector is Information Technology, up 3.5 per cent. The worst-performing sector is Energy, down 0.43 per cent.
The best-performing large cap is Xero (ASX:XRO), trading 7.17 per cent higher at $82.37. It is followed by shares in Evolution Mining (ASX:EVN) and SEEK (ASX:SEK).
The worst-performing large cap is QBE Insurance Group (ASX:QBE), trading 5.77 per cent lower at $13.06. It is followed by shares in Computershare (ASX:CPU) and Rio Tinto Group (ASX:RIO).
Asian news
Stocks in the Asia-Pacific traded mixed on Thursday as investors digested the U.S. Federal Reserve’s smaller rate hike of 25 basis points and Fed Chairman Jerome Powell acknowledged inflation is falling. South Korea’s Kospi rose 1 per cent and the Kosdaq gained 1.41 per cent, leading gains in the region as the nation’s consumer price index rose 5.2 per cent in the first month of 2023 on an annualised basis, ticking upward for the first time in three months, government data showed.
The Korean won stood at 1,221.18 against the U.S. dollar while the dollar index fell by a percent to stand at 101.08.
February FOMC hikes by 25bp, as expected, Powell offers limited pushback to easing financial conditions
The February FOMC meeting hiked rates by 25bp to a target rate of 4.50-4.75 per cent, as had been very widely expected. The decision was unanimous. A few changes to the statement, including a note that inflation “has eased somewhat” but remains elevated, while an explanation incorporating supply/demand imbalances was excised. There was a softening of the reference to the Ukraine war to a factor that is elevating global uncertainty. And there was a change from discussing the “pace” of future rate increases to their “extent.” In the post-meeting press conference, Powell said the Fed will need to stay restrictive for some time, and noted that labour market demand remains substantially above supply. However, Powell said that the disinflationary process has started, also noting their focus isn’t on short-term moves but on sustained changes to broader financial conditions. Also said services inflation remains too high, though expects disinflation in the core services sector soon. Also talked up soft landing, saying his base case is for return to 2 per cent inflation without substantial drop in employment.
Company news
Buy Now Pay Later platform, Splitit (ASX:SPT), has signed a partnership agreement with Ingenico, to create the first one-touch instalment solution embedded into physical POS terminals. In response, Nandan Sheth, Splitit CEO states, “the Ingenico and Splitit solution prevents checkout delays and reduces abandoned sales by providing a seamless experience for card holders.” Shares are trading 7.7 per cent higher at 21 cents.
European Metals Holdings Limited (ASX:EMH) announced that DRA Global Limited has been appointed to complete the DFS for their project in the Czech Republic, with a view to completion of the DFS in Q4 2023. In response, Executive Chairman Keith Coughlan said, “We are pleased to have secured a company of DRA’s calibre, with a proven track record of delivering critical pieces of work like the Cinovec DFS in a timely and efficient manner.” Shares are trading 5 per cent higher at 73 cents.
Imugene’s (ASX:IMU) VAXINIA trial advances to Combination Cohort 1 and Monotherapy Cohort 3. Imugene MD & CEO Leslie Chong said: “Early data arising from our patients dosed at low levels with our CF33 oncolytic virus have indicated immune activation is occurring in the tumour microenvironment, turning the tumour from ‘immunologically cold to hot’. Shares are trading 3.6 per cent higher at 14.5 cents.
Alchemy Resources (ASX:ALY) gravity survey shows an extensive system under cover of pegmatites at their project in WA. In response, Chief Executive Officer Mr James Wilson commented, “The learnings and knowledge gained from this survey will be used to help map out pegmatites at our other high priority lithium targets at Karonie. we are excited to begin using gravity and high resolution drone magnetics technology to aid in mapping out the pegmatite system to the north.” Shares are trading 18.8 per cent higher at 1.9 cents.
ABx Group (ASX:ABX) has received positive results from its desorption tests on rare earth element samples in northern Tasmania, with extractions ranging from 24 per cent to 83 per cent. The tests confirmed the presence of ionic adsorption clay REE deposits in the Deep Leads and Rubble Mound areas, with the highest reported extractions being the highest from a clay-hosted REE prospect in Australia. ABx CEO and Managing Director, Mark Cooksey, commented, “It is extremely pleasing to confirm that there is widespread ionic adsorption clay rare earths at Deep Leads and Rubble Mound.” Shares are trading unchanged at 12 cents.
Commodities and the dollar
Gold is trading at US$1782.70 an ounce.
Iron ore is 1.7 per cent lower at US$126.70 a tonne.
Iron ore futures are pointing to a 1.1 per cent fall.
One Australian dollar is buying 71.37 US cents.
