☕️ ASX Dips on Commodity Blues: Record High Remains Just Out of Reach

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The Australian share market edged lower on Tuesday, with the S&P/ASX 200 index dipping 6.7 points or 0.1% to 81,03.2, just shy of its record closing high on August 1. There was no lead from Wall Street, with the markets closed in the United States due to the Labour Day holiday.

Today’s decline was primarily driven by losses in Consumer Discretionary (-1.91%) and Mining (-1.39%) stocks as investors reassessed the impact of further falls in commodity prices. Seven out of the 11 sectors closed in negative territory.

Consumer-related stocks were among the hardest hit, with several big companies trading ex-dividend. Woolworths (-2.76%) led the decline, falling 2.8% to $34.84, followed by Coles, which dropped 2.4% to $18.50. Other notable losers included Endeavour Group (-3.04%), Bega Cheese (-1.76%), and Wesfarmers (-1.42%).

China's economic concerns have halted the rebound of iron ore prices, pushing futures below $US100 per tonne. Despite a recent 10% increase due to easing oversupply, the discovery of excess inventory at Chinese ports reversed gains. Fortescue (-2.64%), Rio Tinto (-1.66%) and BHP Group (-1.74%) all lost ground. Lithium stocks were also crunched today, with Mineral Resources (-8.45%) the biggest loser on the ASX 200, followed closely by fellow Lithium miner Liontown Resources (-8.45%).

Company News

• EML Payments (+3.55%) completed the sale of its’ Sentenial business unit, including Nuapay, to GoCardless for €32.75 million ($53.4 million). The sale proceeds will pay off debt, transitioning EML from a net debt to a net cash position of $5 million.

• Nickel Industries' (-3.07%) Excelsior Nickel Cobalt HPAL project in Indonesia is progressing, with key equipment arriving soon. The project includes a slurry pipeline from Hengjaya Mine and an innovative in-pit tailings solution, which is expected to reduce environmental impact and improve efficiency. Permit applications are underway for these eco-friendly initiatives.

• Ora Banda Mining (+3.57%) provided a progress report on its Avyhurst Gold Project. At Riverina, infill drilling confirms high-grade ore consistency, with mining on track. Underground operations have begun at Sand King, and portal establishment and mine development are underway.

• Strike Energy (+2.56%) reported significant gas discoveries at Erregulla Deep-1, the deepest onshore well in Australia. Two high-quality, low-impurity conventional gas reservoirs were found in the Kingia and High Cliff Sandstones, with an additional prospective zone in the Irwin River Coal Measures.

Economic Data

• Australia's current account deficit widened to $10.7 billion in Q2 of 2024 from $6.3 billion in Q1, worse than market expectations of a $5.9 billion gap.

• South Korea’s annual inflation rate was 2.0% in August 2024, slowing from a 2.6% gain in July and hitting the lowest level since March 2021. The latest figure matched market expectations and marked the fifth consecutive month below 3.0%.

• U.K. Retail Sales rose 0.8% on a like-for-like basis in August 2024 from a year earlier, accelerating from a 0.3% gain in July to the highest level in five months.

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🌎️ Around The Globe

• Amazon plans to launch an upgraded Alexa in October, powered by Anthropic's Claude AI models. The new version promises more sophisticated, context-aware conversations and will be offered as a separate paid subscription, likely priced between $5 to $10 monthly, apart from Prime memberships.

• Bain Capital has countered KKR's bid for Japanese firm Fuji Soft with an offer of approximately 600 billion yen ($4.10 billion), about 5% higher than KKR's proposal.

• Cathay Pacific has cancelled numerous flights to inspect its Airbus A350 fleet following an engine component failure on a Hong Kong to Zurich flight. The airline, a major A350 operator, is thoroughly examining all its A350 aircraft.

• Semaglutide, marketed as Ozempic for treating Type 2 diabetes and obesity, may have potential anti-aging effects. Recent studies indicate the drug could potentially address various age-related conditions, including heart failure, arthritis, Alzheimer's, and cancer.

• Tesla is reportedly planning to introduce a six-seat variant of its Model Y in China by late 2025, aiming to refresh and broaden the appeal of its popular electric vehicle.

• Thailand's Prime Minister Paetongtarn Shinawatra announced a modification to the government's 450 billion baht ($13.1 billion) "digital wallet" handout program. Part of the funds will now be distributed in cash, deviating from the original plan of transferring 10,000 baht ($292) in credit to 50 million.

• Volvo Trucks has announced a new long-range variant of its FH Electric truck, set to launch in late 2025. This model can travel up to 600 km on a single charge.

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