Market Wrap: Market gives back early gains, Gold smashes 3K

Good Evening,

Welcome to Equity Espresso’s Market Recap. Today, we look at the seven companies about to enter the ASX200 index, plus we’ve added a new dividend payout section later in the newsletter. We’d love to hear from you on the new newsletter format. Respond to the poll at the bottom of the newsletter or reply to this email to let us know what you like or don’t like.

Market Wrap

It was an up-and-down day on the market today, jumping out of the blocks to a strong 68-point gain in morning trading before a late afternoon decline left us with only a marginal increase by the close. The S&P/ASX200 index finished the day only 6.3 pts higher (+0.08%), making it three positive days on the trot following a positive night on Wall Street.

Seven of the 11 sectors closed higher, led by Utilities (+1.71%,) which continues its bumper month, with gains broad-based as Origin Energy (+1.80%), APA Group (+1.40%) and AGL Energy (+1.55%) all rising. Real Estate (+0.71%) and Energy (+0.60%) were the other considerable movers, while Discretionary (-0.58%) and Financials (-0.17%) fell.

New Hope Corporation (+9.60%) was among the best performers on the ASX All Ordinaries after reporting a 26% increase in first-half profits and lifting its interim dividend. Check out the other big movers today by jumping to our ASX Company Announcement section later in the newsletter.

Gold prices traded above US$3,000/oz to fresh record highs as investors seek safe-haven assets amid ongoing trade tariff uncertainty and geopolitical tensions after Israel launched a wave of airstrikes across the Gaza Strip earlier today.

Copper prices approached a five-month high, rising 1% to $4.95/lbs on the Comex market after China announced a plan to boost consumption by increasing incomes. Sandfire Resources (+2.08%) and IGO (+1.40%) saw their share prices climb.

Regal Partners (-0.70%) has had a rocky couple of years, with shares in the investment manager down over 64% in the last five years. More bad news might be on the horizon, with CEO Brendan O’Connor offloading $3.3 million worth of shares in the last week. Something to keep an eye on. Our Insiders section of the newsletter tracks the top 5 ‘insider’ buys and sells in the last 15 days.

Outlook

Wall Street futures for Tuesday again indicate a negative day for U.S. equities, with the Nasdaq (-0.55%) and S&P 500 (-0.39%) expected to fall on the open. Overnight, the U.S. reports housing and industrial production data for February, while we’ll get trade balance data for Europe. Locally, employment data in Australia will be released on Thursday.

Wall Street

Wall Street continued its mini-recovery from a four-week decline, marking strong gains across the board despite some selling towards the close. The S&P500 (+0.64%) and Nasdaq (+0.31%) indices both rose, while the small-cap Russell 2000 (+1.19%) got a nice boost. The Dow Jones (+0.85%) advanced, supported by gains in Walmart (+2.47%) and IBM (+1.86%), marking the second consecutive day of increases for all three major indices. Other markets remained steady, with the U.S. 10-year yield near 4.3%, while gold reached new all-time highs, crossing the US$3,000 mark.

Market gains were widespread across sectors, with ten of eleven major sectors finishing higher. Real Estate (+1.65%), Energy (+1.56%) and Consumer Staples (+1.55%) led the advances, while Consumer Discretionary (-0.44%) was the only sector to close lower.

Affirm (-4.23%) shares fell on reports that Klarna will replace it as Walmart's exclusive buy-now-pay-later loan provider. Incyte (-8.62%) shares dropped 9% after revealing phase three trial results for its’ skin condition treatment. While the company stated the drug met primary endpoints, it was effective in less than half of the trial participants. Intel (+6.82%) shares rose after a Friday regulatory filing showed incoming CEO Lip-Bu Tan plans to purchase $25 million worth of company shares within 30 days of his appointment.

Economic Data

• U.S. Retail sales increased 0.2% MoM in February 2025, rebounding from a 1.2% fall in January but well below forecasts of a 0.6% rise.

• The Housing Market Index in the U.S. declined to 39 in March 2025, the lowest in seven months, from 42 in February and below forecasts of 42.

China Economic Data Recap:

• Fixed Asset Investment: +4.1% in February vs. +3.2% est.

• House Price Index: -4.8% in February, up from -5.0% in January

• Industrial production: +5.9% in January vs. +5.3% est.

• Retail sales: +4.0% in February vs. 3.8% est.

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Company Spotlight

❗️ASX Company Announcements

A snapshot of some of the companies out with news today

• New Hope Corporation boosted first-half profit by 26% to $340.3 million, while underlying earnings rose to $517.3 million as its’ Bengalla mine reached full capacity at 13.4 million/t annually. The coal miner increased its interim dividend to 19 cents per share as production grew and unit costs declined despite lower coal prices.

• Austal is the target of a significant market move as South Korea's Hanwha has initiated an after-market raid seeking a 9.9% stake in the shipbuilder.

• Orthocell has received regulatory approval from Singapore's Health Sciences Authority for its dental membrane Striate+™, which is used for bone and tissue regeneration. This approval complements existing clearances in the U.S., Europe/UK, Australia, New Zealand, and Canada.

• West African Resources reported positive results from resource estimation and scoping studies for potential underground development at its Toega project. The maiden underground resource delivers 4.9 Mt at 3.5 g/t for 560koz gold, with projected annual production averaging 81koz in years 2-6 and total production of 515koz over a 7-year mine life.

• Avita Medical has signed a new Contract Manufacturing Agreement to produce PermeaDerm Biosynthetic Wound Matrix at its Ventura, California facility, effective March 17, 2025. The company also amended its Exclusive Distribution Agreement with Stedical Scientific.

• Contact Energy reported decreased February sales across both its customer and wholesale businesses due to declining electricity demand. Mass market electricity and gas sales fell to 237-gigawatt hours from 252 a year ago, while contracted wholesale electricity sales dropped to 632-gigawatt hours from 643.

• Clinuvel Pharma has announced that CEO Dr. Philippe Wolgen will temporarily step back from his full duties to receive treatment for an acute medical condition. The company's executive team will handle his day-to-day responsibilities for up to three months, with COO Lachlan Hay appointed as Acting CEO.

• Tower has placed its shares in a trading halt to facilitate a $45 million capital return to shareholders through share cancellation. Trading is expected to resume on both Australian and New Zealand stock exchanges on March 20.

• Findi says India's National Payments Corporation approved an ATM interchange fee increase effective May 1, 2025. Fees across the National Financial Switch network will rise to Rs 19 ($0.34) for financial transactions and Rs 7 ($0.13) for non-financial transactions, excluding GST. Findi projects this will boost its White Label ATM business by over A$5.5 million in FY26 and A$10.0 million in FY27 across Revenue, EBITDA, and NPAT.

• Gold Road Resources reported that its Gruyere gold mine output would drop to 70,000-73,000 ounces in the March quarter, down from 91,631 ounces in December, due to two conveyor belt failures and unexpected primary crusher maintenance.

Headlines

🦘 Local News

• Federal Treasurer Jim Chalmers warned that Cyclone Alfred would cost the federal budget $1.2 billion and threaten inflation, while both major parties face pressure to implement difficult economic reforms.

• Rex's 737 simulator centre has been sold to lending firm Navinci for an undisclosed sum. Administrators continue seeking a buyer for the airline's regional passenger operations.

🌎️ Around The Globe

• Alphabet is in advanced talks to buy cybersecurity startup Wiz for around $30 billion, according to the WSJ. This would be Google's largest acquisition ever and could be finalised soon, though previous attempts to reach a deal were unsuccessful.

• BYD unveiled a new "super e-platform" for electric vehicles on Monday that it claims can charge EVs as quickly as refuelling with petrol, with peak charging speeds of 1,000 kilowatts.

• Forever 21 has filed for bankruptcy for the second time in five years, planning to close all 350+ U.S. stores due to fierce competition from online retailers like Shein and Temu.

• A Gold Deposit containing an estimated 1,000 metric tons of high-quality ore was discovered in central China in late 2024, according to Chinese state media. Valued at approximately US$83 billion, this discovery could surpass South Africa's South Deep mine, previously considered the world's largest gold reserve with 900 metric tons.

• Robinhood launched a prediction markets hub on Monday that lets users trade on event outcomes, including expectations for the Federal Reserve's May rate ceiling.

• South Korea's semiconductor exports to China dropped by 31.8% last month, worse than January's 22.5% fall. This decline follows U.S. restrictions on tech supplies to Beijing and raises worries about weakening global demand, threatening the chip sector.

🤖 All About AI

• Baidu has launched two new AI foundation models: ERNIE 4.5, which the company claims costs just 1% of OpenAI's GPT-4.5, and ERNIE X1, designed for advanced reasoning tasks. ERNIE X1 reportedly excels in Chinese Q&A, logical reasoning and complex calculations while being priced at half the cost of competitor DeepSeek R1.

• JPMorgan Chase's software engineers boosted their productivity by 10-20% using the bank's internally developed coding assistant tool, according to global CIO Lori Beer.

Deep Dive

⚖️ ASX Quarterly Rebalance
What it Means

Each quarter, the ASX completes a rebalance across its major indices, including the ASX200. These adjustments can influence a company’s market profile. Inclusion can bring increased visibility, improved liquidity, and passive fund inflows, while exclusion can result in reduced institutional ownership and potential downward price pressure.

The first quarterly rebalance of 2025 will take effect on Monday, March 24. 

We looked at the companies moving in and out and how past companies have previously performed when moving into the primary index. We’ll focus on the ASX 200, where seven companies will be added and removed.

Who's In and Who's Out?

Seven companies will join the ASX200 index: Capstone Copper (CSC), Digi Co Infra REIT (DGT), Imdex (IMD), Macquarie Technology (MAQ), Nuix (NXL), Spartan Resources (SPR), and Temple & Webster (TPW).

They will replace Audinate Group (AD8), Collins Foods (CKF), Charter Hall Social Infra REIT (CQE), Coronado Global Resources (CRN), John Lyng Group (JLG), Kelisan Group (KLS), and Star Entertainment (SGR).

Why the ASX200 Rebalance Matters

Joining the ASX200 triggers automatic investment from index-tracking funds and ETFs, boosting passive inflows and potentially driving stock prices higher. Conversely, companies exiting the index can face selling pressure as passive funds liquidate holdings. These movements create trading opportunities, with investors strategically positioning ahead of the March 7 rebalancing announcement to capitalise on anticipated price changes.

Four of the seven companies to be added have been trading higher since the inclusion announcement, with Spartan Resources (+22.5%) being the best of the lot, primarily due to yesterday's news of a merger with Ramelius Resources. Recently listed Digi Co. (-12.0%) has fallen the most. Excluding the two outliers, the average return of these companies to date is +0.18% vs. -1.20% for the ASX200 index.

Six of the seven companies to be removed from the index have fallen post-announcement, with Star Entertainment unchanged due to being in a trading halt. The average return of the six trading stocks is -5.27%, with Audinate (-12.4%) and John Lyng Group (-9.2%) falling the most.

Historical Performance

The December 2024 rebalance, which was pre-announced on December 6, 2024, saw Clarity Pharmaceuticals (ASX: CU6) added to the ASX200 and Spark New Zealand (ASX: SPK) relegated from the index.

Clarity Pharmaceuticals, a clinical-stage radiopharmaceutical company, officially entered the ASX200 on December 23, 2024; despite the optimism surrounding its inclusion, the stock struggled to maintain momentum, declining 48.7% in the three months after the announcement on December 6. The share price fall can be attributed to rising short interest and widening financial losses in its half-year reporting, with no major clinical setbacks reported during this time. Spark New Zealand fell by 23.8% during the three-month period.

The September 2024 rebalance introduced three companies to the ASX200—Guzman y Gomez (ASX: GYG), Westgold Resources (ASX: WGX), and Yancoal Australia (ASX: YAL)—while removing Domain Holdings (ASX: DHG), Nanosonics (ASX: NAN), and Strike Energy (ASX: STX). The three-month performance post the rebalance announcement on September 6 is as follows:

• Guzman y Gomez +12.60%

• Westgold Resources +1.04%

• Yancoal Australia +16.60%

• Domain Holdings -3.20%

• Nanosonics -8.15%

• Strike Energy +8.11%

Overall, the ASX200 rebalance will present investing opportunities. Inclusion could lead to short-term gains driven by passive fund inflows, while exclusion typically results in downward pressure.

However, as past performance shows, these initial price movements don’t always sustain over the long term. Company fundamentals play a critical role in determining future stock performance.

Brokers

📊 Broker Deep Dive

Pitt Street Research maintains a target price of $9.56 for Weebit Nano (ASX: WBT), representing 390% upside from the current $1.95 share price.

"The company has achieved AEC-Q100 150C qualification for its ReRAM technology, a crucial milestone that opens access to the automotive sector while validating its suitability for industrial and medical applications. WBT's ReRAM offers lower power consumption, faster speeds, and cost advantages over Flash memory."

"Under management's confident leadership, WBT has secured its third license deal with onsemi and formed a collaboration with EMASS for edge AI solutions. The CEO's equity remuneration is tied to securing multiple new deals in 2025, with increased inbound interest following the qualification achievement. Key catalysts include additional commercial partnerships and qualification progress with DB HiTek."

You can access the report below:

Daily Broker Moves

1. Bell Potter has upgraded SmartPay to a Buy from Hold, raising its target price to $1.33 from 68c following Tyro Payments' non-binding NZ$1.00 offer, representing a 70% premium.

2. Macquarie views the upcoming ACCC supermarkets report as a potential buying opportunity, particularly for Woolworths Group. The broker notes markets typically "sell the rumour, buy the fact" with such regulatory inquiries. Amid concerns about tariff-driven global growth slowdown, Macquarie favours defensive sectors like supermarkets.

3. Goldman Sachs has downgraded Endeavour Group from "buy" to "neutral" with a $4.50 price target due to senior management turnover and recovery challenges. The analyst emphasised market share gains as critical for the alcohol retailer but expressed concerns about BWS's competitive position against independents.

Markets

Commodity Prices

Bonds

Forex

Global Health Check

Tariff Watch

🚢 The T Word

Can’t keep up with all the tariff news?
We’ll provide you with a round-up of the latest on the tariff ‘wars.’

Overnight

• Australia could face tariffs of 2-8% on its $30 billion worth of U.S. exports, including beef and pharmaceuticals, if the Albanese government doesn't secure an exemption from Donald Trump's next round of trade measures, which are expected to be announced by April 2.

• Donald Trump announced plans to impose both broad reciprocal and additional sector-specific tariffs beginning April 2. Trump stated that "in certain cases, both" types of levies would be applied to foreign goods imported into the U.S.

• The Federal Treasury estimates that U.S. steel and aluminium tariffs will directly impact Australia's GDP by less than 0.02% by 2030, rising to 0.1%, including indirect effects like a global trade war.

A Little Extra

 ⬇️ Short Data

Top 10 shorted stocks on the ASX - as of March 12

The Insiders

Director buying and selling.
On-market and Off-market trades only.
Net Buy/Sell positions from February 27 - March 14

💵 Dividends

Companies who traded ex-divided today

1. Credit Corp Group (CCP)

2. Seek (SEK)

3. Reece (REH)

4. Nido Education (NDO)

5. NZME (NZM)

The Last Word

DISCLAIMER: Please note that the information provided in this newsletter is for educational purposes only and should not be considered financial advice. It is not intended to encourage you to buy/sell assets or make economic decisions. We strongly recommend conducting your own research before making any investment.