Market wrap: Australian share market recovers after seven weeks of decline
WEEKLY MARKET REPORT
Slowly and cautiously the Australian share market is staging a recovery after seven consecutive weeks of falls.
It has been helped along by a change of sentiment on Wall Street, which is now on track for a monthly gain on its main index, the S&P 500.
The US market has now risen for five of the last six days as investors dared to believe that the spate of bank collapses that happened as interest rates rose rapidly could be behind us.
That belief has been bolstered by forceful action from regulators around the world and have led to some investors snapping up shares in the belief that interest rates could be close to peaking and that cuts could be coming down the track.
Two-year US Treasury bonds have seen their yield plunge from above 5% earlier this month when fears were high to below 3.6 % at one stage, which points to a massive change of sentiment.
ASX 200 adds 3.2% for the week
Whether such optimism proves optimistic or well placed, the Australian ASX 200 index was up 56 points or 0.8% to 7177.8 points on Friday to ring in a weekly rise of 3.2%.
Materials was the strongest sector, rising 1.9% for the day and 7% for the week, with shares in Fortescue Metals (ASX: FMG) up 4.1%, Rio Tinto (ASX: RIO) and BHP (ASX: BHP) both up 2.5%, Evolution Mining (ASX: EVN) up 3%, Cochlear (ASX: COH) up 2.4% and Macquarie Group (ASX: MQG) shares up 2.3%.
An extra factor driving the gains could be the reinvestment of dividends with a very strong $36.3 billion of dividends from many major stocks flowing into the bank accounts of shareholders during March and April.
Gold miners were also very strong performers after the price of the yellow metal rose 1.9% overnight.
Energy stocks fall
Energy was the biggest losing sector, led by shares in Woodside (ASX: WDS) which fell 1.5%, but over the week all sectors posted gains.
The biggest winner of the week was shares in lithium miner Liontown Resources (ASX: LTR) which added 73.2% for the week after it rejected a takeover offer from the world’s largest lithium miner Albemarle.
Shareholders in industrial minerals and technology company, Syrah Resources (ASX: SYR) enjoyed a strong day on Friday, with the shares up 8.9% following on from a 3.4% rise the previous day when its full year results were released, showing a much lower annual loss and record graphite production and sales.
EML shares recover hard after Irish relief
Shares in EML Payments (ASX: EML) enjoyed a relief rally of 31% after it announced that the Central Bank of Ireland has directed a nil% growth cap to EML’s Irish subsidiary, PFS Card Services Ireland Limited, for the year to March 31, 2024.
The led to EML confirming there was no change to its guidance for the current financial year – a better result than many had expected.
Small cap stock action
The Small Ords index rallied 4.33% for the week to close at 2923.3 points.
ASX 200 vs Small Ords
Small cap companies making headlines this week were:
ImpediMed (ASX: IPD)
ImpediMed’s SOZO screening platform, the only FDA-cleared bioimpedance spectroscopy (BIS) technology, has been given a leg-up with its inclusion in the National Comprehensive Cancer Network (NCCN) oncology guidelines.
BIS is a non-invasive and low-cost method for early detection of chronic health conditions, and has been recommended for regular screening of cancer survivors at risk of lymphoedema.
This marks the first time BIS technology has been included in the NCCN guidelines.
ImpediMed managing director Richard Valencia says the company’s technology’s inclusion in the NCCN guidelines is a major validating moment.
He said the company will leverage the guidelines to drive growth and adoption of its solution. The SOZO device is regarded as the world’s most advanced BIS device and delivers precise fluid status and tissue composition data in under 30 seconds.
Aston Minerals (ASX: ASO)
Mineral explorer Aston Minerals has reported gold recoveries of up to 78.1% from gravity-only beneficiation of drill core samples from the Edleston Main prospect in Canada.
The company contracted SGS Lakefield laboratories to conduct heavy liquid separation and superpanning on two samples to determine potential gravity recovery.
Analysis showed gold recovery percentages of 78.1% and 64.1% from the respective samples.
The results will help determine the overall metallurgical recovery of gold through gravity and cyanide leach processes.
Aston recently commenced a drilling program to target the along-strike potential of a 1.5Moz maiden gold resource at the project.
The company is also accelerating the acquisition of additional ground at the project to build its gold and nickel potential.
Radiopharm Theranostics (ASX: RAD)
Radiopharm Theranostics has announced a two-year strategic research collaboration with GenesisCare to develop novel radiopharmaceuticals for complex cancers.
The companies will focus on Australian-based phase 1 clinical trials in areas of high unmet need in oncology.
GenesisCare’s contract research and imaging research organisations will implement three trials involving Radiopharm’s radiopharmaceutical nanobodies.
The trials will target non-small cell lung cancer, brain tumours, and prostate cancer cells.
Radiopharm’s pipeline consists of six distinct platform technologies for use in cancer treatments, currently in pre-clinical and clinical stages of development.
Also this week, Radiopharm’s bank balance was boosted with a $1.56 million research and development tax refund.
Mamba Exploration (ASX: M24)
Widespread rare earth element mineralisation has been confirmed at Mamba Exploration Hyden project in Western Australia.
A maiden drilling program was targeting clay rare REE and mineralisation was found in 20 of the 22 initial holes completed.
Best results were 54m at 758 parts per million (ppm) total rare earth oxides (TREO) and 43m at 877 ppm TREO.
Mineralisation remains open in all directions and can be traced over the entire area of the initial drilling.
Mamba managing director Mike Dunbar said further analysis is being conducted to better understand the distribution of various rare earth oxides within the clay target zone.
Astron Corporation (ASX: ATR)
Astron Corporation upgraded the size of its reserves at its flagship Donald rare earth and mineral sands project in Victoria, which is one of the world’s largest undeveloped critical minerals assets.
The updated JORC-compliant proved and probable reserve totals 309Mt grading 4.4% total heavy minerals for 13.6Mt of heavy minerals.
As part of the upgrade, contained rare earth minerals of monazite and xenotime have increased by 71% to 334,500t, reflecting a 25% increase in monazite and, for the first time, the addition of 89,700t of xenotime.
Astron is modelling a 7.5Mtpa phase one mining operation at Donald based on simple ‘truck and shovel’ open cut methods.
The enhanced reserve will support the planned release of a feasibility study in the June quarter, with start of production slated for early 2025.
The week ahead
The biggest event in the coming week will be the Reserve Bank’s announcement on official interest rates on Tuesday with economists fairly evenly divided on whether the central bank will pause for April or raise rates by 25 basis points.
RBA Governor Philip Lowe is also making a speech on Wednesday which will add some context to the RBA’s expected path as it gets closer to topping out on rate rises.
In the US, the main interest centres around the monthly employment report on Good Friday, with the tight jobs market there, one of the main factors allowing the US Federal Reserve to keep hiking interest rates.
Estimates are that the jobless rate is expected to have stayed at 3.6% in March with hourly earnings up and about 238,000 jobs having been created.
Any differences to those expectations can be expected to move the US market.
Other global releases in an Easter week include a range of purchasing manager surveys that will indicate the strength or otherwise of manufacturing and services sectors.