Weekly wrap: miners push towards new record but banks hold back

It was a close-run thing but the Australian market missed out on setting a new record on Friday thanks mainly to a rare downward pull from the big banks.

At one stage the ASX 200 traded at 8143.6 points – just 5 points away from the record high set in August – but the drag from the banks helped to dampen the market euphoria.

By the close the ASX 200 was up 0.3% or 24.2 points to 8099.9 points – not a new record but still good enough to book in a 1.1% rise for the week.

Only four of the 11 sectors of the ASX rose but those that did were so strong that they hauled the index higher, with gold and the big miners the best of the pack.

It was the increasingly likely prospect of lower interest rates in the US that really boosted the gold price to an all-time high of $US2570.28 an ounce on Friday, sending share prices flying.

Gold stocks soar

Some of the most notable included shares in West African Resources (ASX: WAF) which surged by an effortless 14c or 10.1% to $1.52, Perseus Mining (ASX: PRU) which added 24c or 10.2% to hit $2.59 and Evolution Mining (ASX: EVN) which added 6.9% or 28c to hit $4.32.

Other gold stocks to rise included Ramelius Resources (ASX: RMS) up 9.1% or 19c to $2.28, Newmont (ASX: NEM) up 3.9% or $2.93 to $78.70 and Northern Star (ASX: NST) which rose 56c or 3.7% to $15.60.

It may not have been as dramatic but fresh hopes that the Chinese government would go harder to stimulate the economy drove iron ore prices higher and lifted the fortunes of the big miners.

BHP shares (ASX: BHP) jumped 2% to $39.60, Rio Tinto (ASX: RIO) rose 0.9% to $111.42 and Fortescue (ASX: FMG) shares added 5% to $17.50.

The rally also spilled over to energy stocks with potential output disruptions in the US Gulf of Mexico due to Hurricane Francine pushing up shares in Santos (ASX: STO) 0.7% to $6.98 while Woodside (ASX: WDS) shares added 1.4% to $24.25, even though its US oil production facility was shut due to the storm.

Oil prices were higher with Brent crude up 0.6% to $US72.38 a barrel.

Banks close below fresh records

Heading in the opposite direction after a good week which included record share highs for Commonwealth Bank and Macquarie shares was a retreating banking sector.

Westpac (ASX: WBC) shares shed 0.6% to $32.10, National Australia Bank (ASX: NAB) lost 1.2% to $38.28, Commonwealth Bank (ASX: CBA) lost 0.9% to $141.65 and ANZ (ASX: ANZ) shares shaved off 0.5% to $31.15.

As well as the macro moves among the miners and banks, there were some reactions to corporate news with investors in international toll road group Atlas Arteria (ASX: ALX) pushing the share price up 2% to $5.01 after it started a compensation claim against France for a new “truck” tax.

Shares in Namoi Cotton (ASX: NAM) leapt 4.4% after suitor Singapore’s Olam Agri sweetened its takeover bid to 75c a share from 70c, with Namoi shareholder Harvest Lane backing the higher bid.

Small cap stock action

The Small Ords index rallied 3.14% this week to close at 3001.1 points.

Small cap companies making headlines this week were:

HyTerra (ASX: HYT)

HyTerra has expanded its exploration position at the Nemaha project in Colorado, increasing its total leased acreage from 12,880 to approximately 39,000 acres.

The area is considered highly prospective for “white” hydrogen due to its location above the Mid-Continent Rift.

Backed by Fortescue’s strategic investment, HyTerra is planning a major drilling campaign and expects shareholders to vote on the deal in November.

The company is also working to secure more drilling locations and further expand its portfolio of geologically diverse targets.

xReality Group (ASX: XRG)

xReality Group has secured a $5.6 million contract to provide immersive training capabilities to the US Department of Defense.

The contract involves supplying licenses for its Operator XR virtual reality tactical training system and R&D services over a 20-month period, with potential for future government projects.

This marks xReality’s first US federal government sale, which chief executive officer Wayne Jones highlights as a significant step towards expanding the system’s use in global agencies and the US defense forces.

xReality specialises in VR training and simulations for military and law enforcement, enhancing preparedness in high-risk scenarios.

Aruma Resources (ASX: AAJ)

Aruma Resources has reported promising early results from its Fiery Creek copper project in Queensland, with high-grade copper assays from its initial surface sampling.

The project, acquired in August alongside other assets, has shown strong copper, silver, and antimony mineralization, particularly at the Piper target.

Further ground-based geophysical surveys are planned to define drilling targets.

The company is also following up on historical high-grade copper assays and continuing a systematic exploration strategy across the project.

Melbana Energy (ASX: MAY)

Melbana Energy announced approval for its Block 9 Amistad oil field development in Cuba, marking its first transition to production.

The onshore oil development is expected to begin producing oil in early 2025, with a trial export set for later this year.

The company is also working on remediating its Alameda-2 well to restore production and negotiating offtake arrangements with a major international trader

Melbana aims to accelerate production from its 46 million barrels of contingent resources while focusing on new production wells in the Unit 1B reservoir.

Cauldron Energy (ASX: CXU)

Cauldron Energy has declared its Manyingee South prospect at the Yanrey project in Western Australia a globally significant in-situ recovery (ISR) uranium deposit.

The company identified thick, high-grade mineralisation along a 1.5-kilometre strike length, with four drilled holes confirming the findings.

Further drilling is underway to test extensions of the mineralisation, which could significantly increase the uranium resource at Yanrey.

Cauldron’s exploration strategy includes systematically testing additional palaeochannels on its tenements, with the potential to develop Yanrey into a major production hub.

Petratherm (ASX: PTR)

Petratherm has discovered high-value titanium at its heavy mineral sand (HMS) find in the Muckanippie project area in South Australia.

Titanium, a critical mineral for modern technologies and national security, adds significant value to the project, with grades between 10% and 50% titanium dioxide found across multiple prospect sites.

The shallow mineralisation spans large areas, offering potential for large-scale direct shipment ore, with proximity to the Adelaide-Darwin railway facilitating access to global markets.

Petratherm plans to begin drilling in October to further assess the extent and grade of the mineralisation.

Andean Silver (ASX: ASL)

Andean Silver has announced a 64% increase in tonnage and an 80% rise in total silver equivalent (AgEq) ounces at the Cerro Bayo project in southern Chile.

The updated resource estimate of 8.3 million tonnes grading 341 grams per tonne for 91 million AgEq ounces excludes high-grade silver-gold discoveries at Pegaso 7 and Cristal since Andean’s acquisition in February.

Historical production at Cerro Bayo exceeded 100 million AgEq ounces, with ongoing exploration pointing to significant growth potential.

The week ahead

Once again, the Australian market will largely be subject to international influences with not too many local economic releases around to cause any market reaction.

One of those international influences will be the European Central Bank which is widely tipped to shave 25 basis points off official interest rates on Thursday in response to slowing growth in prices, wages and the overall economy in the Eurozone.

Also influential will be three different readings on US inflation with the release of consumer, producer and international trade numbers.

US CPI expected to moderate

The consumer price index for the US is predicted to rise 0.2% in August which would leave the annual inflation rate steady at 2.3%, which would not stand in the way of the projected cut in interest rates by the US Federal Reserve.

Chinese figures covering activity across retail sales, industrial production, investment and employment could continue to sway the iron ore price which looms large in the outlook for the big miners.

Locally, a forest of companies will trade ex-dividend in the coming week, which usually adds some downward force on the market while there will be investor days held for Brambles (ASX: BXB) and nickel and lithium player IGO (ASX: IGO).

Monthly consumer and business confidence surveys for Australia will also be released.

THIS WEEK’S TOP STOCKS