Market wrap: record level lost as lower commodities and US market bite

The Australian share market gave up the hard won 8000-mark record on Friday, shedding 0.8% as a synchronised fall followed Wall Street lower.

By the close the ASX 200 index was down 0.8% or 64.9 points to 7971.6 points with some of the weaker sectors including banks, miners and technology businesses.

That took the weekly fall to 0.1% in a week that also recorded a fresh high on the ASX 200 of 8057.9 points on Wednesday.

Not even Netflix was worth watching

The local fall followed on from a drop on Wall Street in which the Dow, Nasdaq and S&P 500 all fell with even Netflix shares trading flat in after-hours markets after the streaming television pioneer grew June quarter profits 44% to US$2.15 billion and added more than 8 million new subscribers.

Markets are now anticipating a greater chance of a second Trump presidency which is interpreted as inflationary due to policies to extend tax cuts, cut investment links with China and increase government spending.

Big miners fall on lower prices

The reaction in Australia was worse given that iron ore, gold and copper prices all also dropped overnight, pushing down the prices of the key big miners.

The falls in commodity prices flowed on from weaker economic data out of China which showed GDP growing at just 4.7% with home sales and property investment also weaker.

China’s steel industry is also entering the summer period in which demand usually weakens, keeping downward pressure on the price of the big miners which make up a large slice of the ASX 200.

Materials were the weakest local sector, down 1.5% on lower commodity prices.

Gold miners shed some gains

Gold miners, which had jumped on Thursday, sold off with shares in Evolution (ASX: EVN) down 9c or 2.2% to $4, Northern Star (ASX: NST) shares down 1.5% and Newmont (ASX: NEM) down 2.8%.

It was a similar picture for the big iron ore miners with BHP (ASX: BHP) off 2.1%, Fortescue (ASX: FMG) down 1.9% and Rio Tinto (ASX: RIO) shares down 1.7%.

The picture in the banking sector was similarly bleak with sector leader Commonwealth Bank (ASX: CBA) down 0.8%, ANZ (ASX: ANZ) shares off 1.2%, and NAB shares (ASX: NAB) also losing 1.2%.

Westpac (ASX: WBC) shareholders got some good news with the banking regulator APRA agreeing to chop in half the amount of capital Westpac must hold in reserve to $500 million in response to the lender’s improved risk management.

Still, Westpac fell 0.9% to $28.22.

One of the bigger casualties on the share market was land lease pioneer Lifestyle Communities (ASX: LIC) with its shares shedding a hefty 13.9% to $9.51 after controversy about the legality of exit fees it charges people to sell their houses.

Lifestyle decided to scrap all of its forward earnings and operational guidance, blaming media coverage and uncertainty over its construction business.

Shares in Afterpay-owner Block (ASX: SQ2) dropped 4.3% to $102.23 after the company announced the closure of its Cash App peer-to-peer payments business in the UK.

Small cap stock action

The Small Ords index rose 1.07% for the week to close at 3032.6 points.

Small cap companies making headlines this week were:

Miramar Resources (ASX: M2R)

Miramar Resources revealed high-grade assay results from its initial reconnaissance at the Chain Pool copper-lead-zinc-silver project in the Gascoyne region of Western Australia.

Samples from the Joy Helen prospect yielded significant results, including up to 5.49% copper, 42.0% lead, and 73.48 grams per tonne silver.

Executive chair Allan Kelly highlighted the diverse potential of the under-explored project, noting the absence of modern exploration despite high-grade mineralisation.

Historic drilling in the 1960s and rock chip sampling by CRA Exploration and Quadrio Resources revealed substantial lead and copper mineralisation.

Miramar plans to conduct a systematic rock chip sampling program and a grid soil survey to further investigate the mineralisation once the exploration licence is granted.

Adisyn (ASX: AI1)

Adisyn has entered into a binding collaboration agreement with international semiconductor developer 2D Generation. The partnership aims to merge Adisyn’s expertise in data centre management and cybersecurity with 2D Generation’s advanced AI semiconductor solutions.

AI1 chair Shane Wee highlighted that the collaboration supports Adisyn’s strategy of AI enablement and advanced cybersecurity solutions.

2D Generation, known for its semiconductor IP innovations, will focus on creating IP for electronic photonic power and systems on chips, targeting AI, data centres and high-performance computing.

Wee believes the partnership will advance high-performance, energy-efficient semiconductor solutions crucial for AI and data centres.

Flynn Gold (ASX: FG1)

Flynn Gold is intensifying exploration at its 100%-owned Golden Ridge project in north-east Tasmania after discovering an extensive gold-bearing quartz vein system.

Geologists have found previously unmapped historical trenches, pits, and adits from the 1930s, just 250 meters north of the historic Trafalgar mine.

The discovery of multiple high-grade gold veins has prompted the company to adjust its diamond drilling program to test beneath these old workings.

Initial assessments suggest the vein system may expand the gold mineralisation footprint at Trafalgar to a 500-meter-wide corridor.

Flynn Gold is currently drilling to a depth of 250 meters and has received government approval for additional drill holes, while also conducting soil sampling in unexplored areas of Golden Ridge.

HyTerra (ASX: HYT)

HyTerra has appointed former Shell chief scientist Dr Dirk Smit as its chief geophysicist to enhance its helium and hydrogen exploration efforts in the US.

Dr Smit brings over 30 years of experience from his tenure at Shell, including roles focused on geophysics, energy transition, and net-zero emission systems.

He is currently an energy strategy consultant and holds positions at Oxford University, MIT and the Indian Institute of Science.

HyTerra executive director Avon McIntyre emphasised Dr Smit’s value to their exploration activities, particularly at the 100%-owned Nemaha Project in Kansas, where new drilling permits have been granted.

Dr Smit joins HyTerra as they plan to commence a new drill program this quarter.

Noronex (ASX: NRX)

Noronex has entered an earn-in agreement and strategic alliance with South32 (ASX: S32) to accelerate copper exploration in Namibia, with South32 funding $15 million over five years to earn up to 60% equity in Noronex’s Humpback-Damara project.

The initial program includes a $3 million commitment for a detailed in-fill gravity survey and subsequent drilling at the Fiesta prospect and Damara Zone.

Noronex will manage the work and charge South32 a 7.5% operator fee.

Additionally, South32 and Noronex have formed a strategic alliance to target new copper and base metal projects, with South32 providing $200,000 per year in generative funding and a potential bonus for multiple accepted exploration opportunities.

Noronex’s extensive tenements cover over 8,500 sq km in the Kalahari copper belt, known for significant copper deposits.

The week ahead

Locally there is no doubt the detailed labour force figures out on Thursday will be a pivotal focus for investors who are looking for any signs of economic weakness in the face of high interest rates.

Most pundits expect employment to jump by 20,000 in June but they are also looking for the unemployment rate to grow to 4.1% as tight economic times flush out more job seekers, along with strong immigration and a rising participation rate.

In the US, apart from the ongoing election campaign some of the things to watch out for include new and existing home sales, economic growth figures (GDP), jobless claims, trade balance and personal income and spending.

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