by Peter Milios
New Zealand’s economy has fallen into a recession as its gross domestic product (GDP) declined by 0.1 per cent in the March quarter, marking two consecutive quarters of negative growth. The economy had already contracted by 0.7 per cent in the December quarter. This recession was anticipated, as the Reserve Bank of New Zealand had raised interest rates to 5.5 per cent. In addition, the country experienced a high inflation rate, reaching 6.7 per cent for the year ending in March.
In addition, the unemployment rate in Australia pleasantly surprised experts by dropping 0.1 percentage point to 3.6 per cent. The Australian Bureau of Statistics revealed that employment rose by approximately 76,000 individuals, while the number of unemployed individuals decreased by 17,000. Economists had anticipated the unemployment rate to remain steady at 3.7 per cent and the addition of 17,500 jobs. With this robust employment report, it is probable that the Reserve Bank will be compelled to continue raising interest rates.
At noon, the S&P/ASX 200 is 0.12 per cent higher at 7,170.3
The SPI futures are pointing to a rise of 1 point.
Best and worst performers
The best-performing sector is Information Technology, up 0.99 per cent. The worst-performing sector is Health Care, down 1.99 per cent.
The best-performing large cap is Aurizon Holdings (ASX:AZJ), trading 4.06 per cent higher at $3.715. It is followed by shares in James Hardie Industries plc (ASX:JHX) and Fortescue Metals Group (ASX:FMG).
The worst-performing large cap is Meridian Energy (ASX:MEZ), trading 5.51 per cent lower at $4.80. It is followed by shares in Lynas Rare Earths (ASX:LYC) and Pilbara Minerals (ASX:PLS).
Asian news
Asia-Pacific markets are set to rise after the U.S. Federal Reserve held off on a rate hike while projecting that another two quarter percentage point moves are on the way before the end of the year.
The latest decision left the Fed’s key borrowing rate in a target range of 5 per cent-5.25 per cent.The central bank forecast it will raise interest rates as high as 5.6 per cent before 2023 is over.
In Asia, New Zealand fell into a technical recession after its first quarter gross domestic product fell 0.1 per cent year on year, after reporting a revised 0.7 per cent decline in the final quarter of 2022.
In Japan, the Nikkei 225 inched up marginally, while the Topix fell 0.13 per cent as the Bank of Japan kicks off its two-day monetary policy meeting.
South Korea’s Kospi opened 0.54 per cent up, with the Kosdaq seeing a larger gain of 1.23 per cent.
China will release a slew of economic data, including industrial output, retail sales and house prices for May. Hong Kong’s Hang Seng index is set for a rebound after snapping a five day winning streak, with futures at 19,692 compared to the HSI’s close of 19,408.42.
Company news
Magnis Energy Technologies (ASX:MNS; OTCQX:MNSEF; FSE:U1P) announced that the lithium-ion batteries produced at the iM3NY Battery Plant have received UN38.3 certification. MD Hoshi Daruwalla commented: “Our batteries have met the strict safety requirements developed by the UN for transportation.” Shares are trading 1.43 per cent lower at 17.25 cents.
GreenTech Metals (ASX:GRE) has confirmed the presence of spodumene-bearing pegmatites on the Company’s 100 per cent owned Ruth Well Project in WA. Executive Director Thomas Reddicliffe commented: “The spodumene bearing pegmatites occur in a zone up to 200m wide which also includes barren pegmatites.” Shares are trading 254.76 per cent higher at 37.25 cents.
QX Resources Limited (ASX:QXR) announced that diamond drilling had intercepted massive sulphide mineralisation from their deposit in Northern Sweden, held by Bayrock Resources, in which QXR has a significant holding. Shares are trading 3.03 per cent higher at 3.4 cents.
Lake Resources (ASX:LKE) has announced that their Measured and Indicated resources have increased from 2.19 to 2.93 million tonnes of lithium carbonate equivalent at their Kachi Project. Michael Gabora at Lake Resources, commented, “The activities started in March of last year have led to a significantly improved understanding of both the spatial and vertical extent of lithium brine.” Shares are trading 0.53 per cent higher at 47.3 cents.
Commodities and the dollar
Gold is trading at US$1946.80 an ounce.
Iron ore is 1.2 per cent higher at US$114.30 a tonne.
Iron ore futures are pointing to a 1.55 per cent rise.
One Australian dollar is buying 67.91 US cents.
