Market wrap: Nasdaq’s technology flu reaches Australia
WEEKLY MARKET REPORT
Australia caught a dose of the technology flu on Friday, following the US market lower with the ASX 200 shedding 0.2%.
That was modest compared to a 2% fall on the tech heavy Nasdaq exchange but the damage within the local technology space was still severe, with the sector down 2.7%.
Shares in accounting software provider Xero (ASX: XRO) fell 3.9%, TechnologyOne (ASX: TNE) shares fell 2.9% and Life360 (ASX: 360) declined 2.9%.
In the US a weak revenue forecast had sent Netflix shares down 8.4% and Tesla shares fell 9.7% after investors were spooked by falling gross margins.
Potential higher rates spook buyers
Overall, the market was weaker on higher chances of interest rate rises from central banks after continuing strength in job markets, although the ASX 200 was still up by 0.1% for the week.
Some of the bigger share price falls were among gold mining shares as the rampaging US dollar forced the price of gold lower.
Shares in Bellevue Gold (ASX: BGL) fell 3.6% while shares in Perseus Mining (ASX: PRU) fell 4.4%.
Shares in sector leader Newcrest Mining (ASX: NCM) fell 5.3%, chasing down shares of its takeover bidder Newmont which suffered a 6% share price fall after it reported lower than expected quarterly earnings.
It wasn’t all bad news with shares in Mosaic Brands (ASX: MOZ) surging 18.8% after the fashion retailer forecast a $17 million earnings before interest, tax, depreciation and amortisation result for the 2023 financial year, a big improvement from the previous year’s $16 million loss.
Small cap stock action
The Small Ords index fell 0.99% to 2874.6 points this week.
ASX 200 vs Small Ords
Small cap companies making headlines this week were:
Perpetual Resources (ASX: PEC)
Perpetual Resources signed a binding option agreement with RTB Geologia E Mineração to acquire four lithium exploration permits in the mining-friendly state of Minas Gerais, Brazil.
The permits are strategically located within the ‘eastern Brazilian pegmatite district’, known for its significant hard-rock lithium spodumene deposits.
The area offers advantageous infrastructure and is situated about 20km from the Tier 1 Grota do Cirilo spodumene mine, owned by Sigma Lithium Corp.
Perpetual plans to begin rapid exploration in the coming months, expanding its project portfolio with this valuable asset.
Imugene (ASX: IMU)
Imugene and RenovoRx have formed a strategic research collaboration to optimise the delivery of Imugene’s CF33 oncolytic virus therapy for hard-to-reach tumours.
The partnership will explore the use of RenovoRx’s proprietary TAMP (trans-arterial micro-perfusion) platform in administering CF33 for difficult-to-access cancers such as pancreatic and liver cancers.
The collaboration, which will last up to four months, aims to improve cancer therapy uptake, often limited in traditional administration methods due to dense fibrous tissue and insufficient blood vessels.
In previous studies, RenovoRx demonstrated a significant increase in local tissue concentration using the TAMP platform compared to conventional methods.
RemSense Technologies (ASX: REM)
RemSense Technologies has secured a $245,000 contract with Woodside Energy to create a digital twin of one of the company’s floating production storage and offloading vessels using its VirtualPlant technology.
The one-year contract is set to begin in early August and comes as RemSense is expanding its customer base and capabilities.
The VirtualPlant technology, which integrates with existing asset management systems, is particularly useful for the multi-billion dollar offshore decommissioning programs in Australia.
The technology not only improves productivity and safety but also provides a cost-effective solution for remote monitoring and maintenance, reducing the need to send multiple people on-site.
Felix Gold (ASX: FXG)
Felix Gold has discovered high-grade stibnite (antimony), a critical mineral primarily used in military applications, at its Treasure Creek project in Alaska.
The company’s findings include various significant antimony results from the initial four drill holes at the NW Array prospect
Anthony Reilly, Felix’s managing director, highlighted the potential value of this discovery, considering stibnite’s importance to US economic and national security.
Wide Open Agriculture (ASX: WOA)
Wide Open Agriculture (WOA) has been awarded a $5 million AUD grant from the Western Australian Government’s Investment Attraction Fund to establish a production facility for its innovative Buntine Protein enhanced oat milk.
The grant aims to boost WOA’s domestic production capabilities, improve manufacturing efficiencies, and reduce costs, helping the company to effectively navigate the rapidly evolving consumer beverage markets.
The facility, located in a region globally recognised for high-quality oat production, will produce various formats of oat milk using WOA’s proprietary lupin-based plant protein.
The grant, to be allocated in stages, reflects the shared vision of WOA and the Western Australian Government for the future of plant-based nutrition.
QMines (ASX: QML)
QMines has signed an access agreement with a landowner, following the discovery of three large copper gossans near its Mt Chalmers flagship project.
The company is planning a 30-hole drilling program at the new Artillery Road find, and has identified 34 individual anomalies across the gossans through an electromagnetic survey.
The anomalies show promising signs of mineralisation, and the company is now carrying out further ground reconnaissance mapping.
Meanwhile, QMines is also focusing on drilling the southwest extension of the Mt Chalmers deposit, retaining its Zero Carbon certification, and completing a pre-feasibility study on the Mt Chalmers project.
The week ahead
One of the more important events this week will be the release of the Australian inflation data, which comes hot on the heels of lower-than-expected numbers out of the US and Britain.
Ironically, the actual numbers are starting to prove that inflation was transitory – just not as quick to fall as everybody expected.
At the same time, central banks seem even more intent than ever to snuff out this retracting inflation problem by keeping up with interest rate rises.
Analysts generally expect the annual growth rate for headline CPI to fall from 7% to 6.2% in the June quarter, while the annual underlying rate is expected to fall from 6.6% to 6.1%.
Monthly numbers are expected to fall from 5.6% to 5.4%.
Offshore, the US and UK central banks are widely expected to raise their official interest rates by 0.25% to continue their fight against inflation.
Other things to watch out for include consumer confidence figures, retail trade numbers and the beginning of the company reporting season.
Some of the better-known companies holding shareholder meetings this week include Rio Tinto, Unibail-Rodamco-Westfield, Sandfire Resources, Champion Iron, ALS, Australian Agriculture Co., Macquarie Group and Smartpay.
A swag of US companies that are household names will also be reporting profits this week including Google owner Alphabet, General Motors, Microsoft, Verizon, Visa, Boeing, Coca-Cola, Meta Platforms, Amazon, Ford Motor, Intel, Mastercard, McDonald’s, Chevron, Exxon Mobil and Procter & Gamble.