Weekly wrap: minor fall comes after ten positive sessions

It was a close-run thing but the Australian share market recorded its first fall after ten positive sessions on Friday, with the ASX 200 index shedding just 3.1 points to 8023.9 points.

With a major speech from US Federal Reserve chair Jerome Powell in prospect and a 1.7% fall on the Nasdaq as a lead in, the efforts by the local market were actually fairly good.

It was still a very positive week despite the soggy finish, with the index gaining 0.7% or 58 points as the profit results season remained patchy with some positive signs.

Investors seeking quality results

One of the most encouraging things about the Australian market’s defiance in the face of a weak offshore lead and central bank uncertainty was that there are clear signs that investors are seeking out quality businesses that have maintained margins to produce strong results.

Companies such as WiseTech (ASX: WTC) that produced a heady combination of growth and rising margins were rewarded for that effort after their results, with a solid search for quality among the businesses that have shown strong cost control.

One of the better results released on Friday was from New Zealand based healthcare group Fisher & Paykel (ASX: FPH) which upgraded profit guidance to between NZ$320 million and NZ$370 million for financial year 2025.

That news saw shares jump 11.9% to $32.83.

Burritos go higher

Another strong performer was burrito franchise chain Guzman y Gomez (ASX: GYG) with its shares hitting a record post float high of $35 before closing up 3.5% for a still strong close of $34.71.

In other news, shares in $6 billion funds manager Elanor Investors (ASX: ENN) were suspended as the manager sought to refinance its debt.

It wasn’t all sweetness and light with shares in poultry group Inghams (ASX: ING) losing a hefty 20.1% to $3.09 after it warned investors that sales were waning.

Accent Group (ASX: AX1) shares lost 15.3% to $2.05, after the footwear retailer undershot investor expectations with its profit report.

Lender Latitude Financial (ASX: LFS) said its cash profit grew 140% to $27 million for the six months to June 30 but its shares shed 1.7% to $1.15.

ANZ needs capital top-up

In general terms, utilities, energy, tech and materials were weaker after the rebound in iron ore prices stalled.

For the banking sector, ANZ (ASX: ANZ) fell 2.2% after ASIC decided it needed a $250 million capital add-on.

Westpac (ASX: WBC) weakened slightly but both Commonwealth Bank (ASX: CBA) and National Australia Bank (ASX: NAB) shares strengthened.

Small cap stock action

The Small Ords index slipped 0.19% for the week to close at 3016.4 points.

Small cap companies making headlines this week were:

Elixir Energy (ASX: EXR)

Elixir Energy has recorded the deepest flow of coal gas to the surface ever in Australia at its Daydream-2 well, part of the Project Grandis in Queensland’s Taroom Trough.

The well, initially drilled to assess coal seam potential, revealed an unexpected sandstone reservoir, which has shown positive gas flows.

This success marks a significant step toward converting prospective resources into contingent resources, with Elixir now aiming to obtain an initial contingent resource estimate.

Managing director Neil Young described this achievement as a “fantastic outcome,” highlighting the potential for large-scale gas production from the deep coals.

Elixir plans further testing across multiple Permian zones to gather more data and expand their resource base.

Larvotto Resources (ASX: LRV)

Larvotto Resources has received final permits for a second exploration drilling program at the Hillgrove gold-antimony project in New South Wales.

The company plans to start 5,250 metres of reverse circulation drilling at the Clarks Gully prospect next week, focusing on a large geochemical anomaly and aiming to increase resource confidence to a 20m depth.

Hillgrove, known for its high-grade gold and antimony, ranks among the top ten antimony projects globally and is Australia’s largest antimony deposit.

Historically, the project has produced over 750,000 ounces of gold and 40,000 tonnes of antimony, with further exploration planned for multiple high-grade targets.

Antimony, a critical mineral, has seen prices double to US$22,000, driven by its essential role in solar panel production.

Dundas Minerals (ASX: DUN)

Dundas Minerals has identified high-grade gold intercepts at its Windanya and Baden-Powell projects near Kalgoorlie, Western Australia.

The company plans to deepen a previously drilled hole by 150m after resampling revealed a high-grade gold intercept of 9.5 grams per tonne, following an initial assay error.

Encouraged by these results, Dundas will also drill two additional reverse circulation holes up to 300m deep at the Aquarius gold prospect, where high-grade gold anomalies were previously detected.

The company has received work approvals for the new drilling campaign, set to begin in September.

Dundas successfully completed its second drilling program at Windanya in May 2024, testing for primary gold mineralisation across six areas.

Terra Uranium (ASX: T92)

Terra Uranium has entered into a definitive agreement with ATHA Energy, enabling a joint venture for uranium exploration in the Athabasca Basin.

The agreement allows Terra to grant ATHA an option to acquire up to 60% of its Pasfield Lake development, while Terra can acquire up to 70% of ATHA’s Spire and Horizon projects.

This deal aims to increase Terra’s exposure in the region and consolidate ATHA’s interests while reducing exploration costs.

Terra will continue advancing its core projects, including HawkRock and Parker Lake, and will provide ATHA with access to its infrastructure at Pasfield Lake.

Both companies plan to begin drilling and further exploration next year, targeting multiple conductive zones and prospective uranium-rich areas.

FireFly Metals (ASX: FFM)

FireFly Metals is launching a $10 million exploration campaign at its Green Bay project in Newfoundland, Canada, after identifying promising copper and gold targets.

The targets were defined through a detailed review of historical data, indicating potential for VMS-style and orogenic vein-style gold deposits, particularly outside the main Ming mine.

Key areas of focus include the Rambler Main gold and copper mine, the Rambler East mine, and the Little Deer mine, each showing promising mineralisation.

The exploration campaign includes 10,000m of surface drilling set to begin later this year, supported by a $100,000 grant from the Newfoundland and Labrador provincial government.

FireFly aims to accelerate new discoveries and resource growth, with resource updates planned for late 2024 and early 2025.

The week ahead

In Australia one of the highlights will be the inflation figures out on Wednesday with analysts expecting that the subsidies for household power bills will lead to a 3.4% rise in the consumer price index to 3.4% in the year to July – down from the 3.8% for the year to June.

In the US there is a large swag of data released but the most significant is probably the US Federal Reserve’s preferred inflation measure of core personal consumption expenditure index (PCE) which is out on Friday.

Signs that it is moving down to the Fed’s 2% target would increase the chances and speed of official interest rate cuts.

An estimate of economic growth in the US will also be closely watched on Thursday.

The fifth week of company profit results will continue to serve up shocks and surprises with some of the bigger names lifting the lid on their performance including BHP, Coles, Woodside, Woolworths, Qantas, Wesfarmers and TPG.

THIS WEEK’S TOP STOCKS