AU Morning Wrap: ASX Flat; Sims Drops 12% on Scrap Metal Outlook

Both tech stocks have a major influence on the broad U.S. stock index. At the end of August, Apple and Nvidia were responsible for almost 30% of the S&P 500’s 2023 total return, including dividends, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

The Australian sharemarket has sunk at the open, dragged down by falls in tech stocks.

Scrap metal recycler Sims is among the worst performing, down 12.5 per cent. The company is now forecasting earnings to break even in the first quarter of FY24, due to ongoing scrap price and demand issues.

Shares Atturra are up 1.7 per cent on news the IT services outfit is set to acquire fellow ASX-lister and managed services provider Cirrus Networks. The deal values Cirrus shares at 5.3¢ apiece, around a 30 per cent premium to their close on Friday. Shareholders can take the offer on a cash-only, mixed or scrip-only form. Shares in Cirrus are up 31.7 per cent.

West African gold producer Tietto Minerals has dropped 4.1 per cent after retracting two announcements from last week related to the company’s production outlook.

The deal values Cirrus shares at 5.3¢ apiece, around a 30 per cent premium to their close on Friday. Shareholders can take the offer on a cash-only, mixed or scrip-only form.

The deal is valued at up to $49.3 million and expected to close in December this year.

As a result, the company is now forecasting earnings to break even in the first quarter of FY24.

In a market update, the company said that steel demand remained subdued, and that the scrap price did not appear to be sufficient to stimulate robust scrap supply.

The miner, which began production from its West African mine earlier this year, said the two announcements contained information related to an updated seven-year production schedule and an updated 2023 resource model that has not been released to market.

The company says the full life of the mine and updated reserves statements will be available for release at the end of September 2023.