AU Morning Wrap: ASX Drops; Mining, Oil Shares Tumbles

Moomoo News AU wrote a column · May 31, 2023 00:31

G'day, mooers! Check out the latest news on today's stock market!
• Nasdaq rises on tentative debt ceiling deal
• ASX drops at open
• Stocks to watch: St Barbara, Life360, Silver Lake
- Moomoo News AU

AU Morning Wrap: ASX Drops; Mining, Oil Shares Tumbles

Wall Street Summary

Tech stocks kept ticking higher and Treasury yields declined Tuesday following a tentative deal over the weekend to raise the U.S. debt ceiling.

The yield on the benchmark 10-year Treasury note reversed course after climbing into the weekend. It ended Tuesday at 3.697%, down from 3.820% at the previous close. The yield on one-month Treasury bills dropped to 5.224%, from 5.496% before the debt deal.

Stocks were mostly higher. Enthusiasm for companies involved with artificial-intelligence and the ongoing flight to the market's biggest tech stocks lifted the $Nasdaq Composite Index (.IXIC.US)$, which rose 0.3%. The $S&P 500 Index (.SPX.US)$ inched up less than 0.1%. The blue-chip $Dow Jones Industrial Average (.DJI.US)$ gave up about 51 points, or 0.1%.

AU Market Watch

The Australian sharemarket opened lower, led by a sell-off in mining and oil companies amid weaker commodity prices.

The $S&P/ASX 200 (.XJO.AU)$ was down 50.6 points, or 0.7 per cent, 7158.7 by 10:22am as all 11 sectors declined.

$Woodside Energy Group Ltd (WDS.AU)$ fell 2.1 per cent, $Santos Ltd (STO.AU)$ fell 1.6 per cent and $Whitehaven Coal Ltd (WHC.AU)$ slumped 4.8 per cent. That's after crude oil fell below $US70 a barrel and as benchmark coal prices slumped 12.1 per cent.

The big miners also retreated amid weaker iron ore price. $BHP Group Ltd (BHP.AU)$ fell 1.7 per cent, $Rio Tinto Ltd (RIO.AU)$ was off 1.5 per cent and $Fortescue Ltd (FMG.AU)$ was down 1.6 per cent.

Stocks to Watch

$St Barbara Ltd (SBM.AU)$: $Silver Lake Resources Ltd (SLR.AU)$ said it was willing to "rapidly progress" with a revised proposal to buy St Barbara's Leonora assets in Western Australia.

"Silver Lake confirms it has today provided St Barbara a revised non-binding and indicative offer with improved conditionality that addresses St Barbara's concerns on the requirement for financer due diligence," it said in the statement. "The implied value of the Silver Lake Proposal is A$718 million."

The offer includes $370 million in cash and 327.1 million Silver Lake shares valued at $3482 million.

$Paladin Energy Ltd (PDN.AU)$: Paladin Energy has confirmed it is not aware of any imminent proposed Namibian legislative changes that would affect the ownership of its 75 per cent-owned Langer Heinrich mine.

The company noted commentary regarding a potential desire for the Namibian government to own a minority equity interest in mining and petroleum companies operating in Namibia.

Former $BUBS Australia Ltd (BUB.AU)$ chief executive Kristy Carr is leading a group of investors who plan to spill the board and install a former a2 Milk executive, Peter Nathan, to lead the infant formula manufacturer.

Multiple sources who spoke on condition of anonymity said Dennis Lin, the company's former executive chairman, along with several others were part of the dissident group. Their combined holdings are expected to be around five per cent, which will allow them to call an extraordinary meeting.

$Challenger Ltd (CGF.AU)$: Citi is sticking to a sell rating on Challenger after the annuities and funds management business updated investors on its operations and profit guidance at an FY 2023 profit day.

"In our view, positives from Challenger's investor day include: FY23E profit guidance refined to be slightly above mid-point, the falling maturity rate, wins of mandates and contracts in both businesses, and only a modest immediate negative mark to market on property," said Citi.

$Life360 Inc (360.AU)$: Life360 chief executive Chris Hull said the location tracking software company was "seeing strong momentum" in the first quarter results that were recently published.

Hull said in prepared comments ahead of the company's AGM that he had seen "continued progress" in monthly active users, with a 33 per cent uplift to around 51 million users, and "continued strength" in returning monthly active users.

$Immutep Ltd (IMM.AU)$: Immutep is tapping the market to raise around $80 million to expand its clinical portfolio and strengthen its balance sheet.

The biotech company's offer will comprise a fully underwritten institutional placement to raise around $50 million and an accelerated non-renounceable pro rata offer to eligible Immutep shareholders to raise $30 million.

$Aurelia Metals Ltd (AMI.AU)$: Gold and base metals explorer Aurelia Metals had two brokers rounding up investors for a $40 million equity raising on Wednesday morning, soon after it locked in new debt facilities, Street Talk reported.

The cash call was split into a $10 million placement and a $30 million pro-rata accelerated non-renounceable entitlement offer on a one-for-3.72 basis.

Trading Ex-div: $Pengana International Equities Limited (PIA.AU)$