The Australian sharemarket saw a midday rally in tech stocks that helped it recover from earlier losses in the materials sector, ultimately closing slightly higher. The ASX/S&P 200 ended the day up 0.1% at 7042.7, though it remained close to its lowest point since July 11. The All Ordinaries index also recorded a 0.1% gain.
The material sector, particularly sensitive to China's economic performance, was the hardest hit due to S&P's downgrade of China's annual economic growth forecast from 5.2% to 4.8%. This downgrade was attributed to limited fiscal and monetary easing measures. Iron ore futures in Singapore dropped 4.1% to $US116.25 per tonne from a recent high of $US123.60 per tonne reached the previous week.
A survey by Mysteel revealed that less than half of 90 Chinese downstream construction companies planned to replenish their inventories before a national holiday, with expectations of further price softening due to weak demand. Material stocks consequently sank 1%, with companies like Fortescue Metals and Rio Tinto experiencing declines.
However, gains in the tech sector helped offset these material losses, with tech stocks ending the day 1.9% higher. Notable performers included WiseTech Global, Xero, and Altium, which all recorded positive gains.
Futures
The Dow Jones futures are pointing to a rise of 60 points.
The S&P 500 futures are pointing to a rise of 9.5 points.
The Nasdaq futures are pointing to a rise of 42.25 points.
The SPI futures are up 8 points.
Best and worst performers
The best-performing sector was Information Technology, up 1.92 per cent. The worst-performing sector was Materials, down 0.73 per cent.
The best-performing large cap was Whitehaven Coal (ASX:WHC), closing 3.41 per cent higher at $6.98. It was followed by shares in AGL Energy (ASX:AGL) and Yancoal Australia (ASX:YAL).
The worst-performing large cap was Allkem (ASX:AKE), closing 3.25 per cent lower at $11.62. It was followed by shares in Pilbara Minerals (ASX:PLS) and IGO (ASX:IGO).
Asian markets
Japan's Nikkei has gained 0.85 per cent.
Hong Kong's Hang Seng has lost -1.55 per cent.
China's Shanghai Composite has lost -0.59 per cent.
Company news
Global lithium leader, Allkem (ASX:AKE) has made several announcements today, however we will focus on the one made regarding their James Bay Lithium Project. The updated Feasibility Study confirms a robust, high-value hard rock lithium operation utilising renewable hydropower, in which there was a ~108% increase in pre-tax Net Present Value (“NPV”) to US$2.9 billion. Shares closed 3.25 per cent lower at $11.62.
ENRG Elements (ASX:EEL, OTC:EELFF) has executed a binding Share Purchase Agreement with Kavango Resources, for the sale of 90% of its Ghanzi West Copper-Silver Project. The proceeds from the sale of 90% of the Ghanzi West Project will enable the Company to advance its projects in Niger. Shares closed flat at 0.6 cents.
Redflow (ASX:RFX) has announced that the U.S. Department of Energy has approved funding for a 34.4 MWh long-duration energy storage microgrid project in which Redflow has been named as the battery provider. In response, Redflow CEO and Managing Director Tim Harris said: “Our batteries are ideally suited for daily use in the Central Valley’s extreme heat, and we’re proud to provide the resources the hospital needs to ensure safe, reliable operations.” Shares closed 3.64 per cent lower at 27 cents.
Commodities and the dollar
Gold is trading at US$1,940.70 an ounce.
Iron ore is 3.1 per cent higher at US$123.60 a tonne.
Iron ore futures are pointing to a -2.5 per cent fall.
Light crude is trading $0.41 higher at US$90.44 a barrel.
One Australian dollar is buying 64.17 US cents.
