ASX Trading Wrap: Lithium stocks resurface, as Whitehaven and Origin sink on downgrades

ASX Trading Wrap: Lithium stocks resurface, as Whitehaven and Origin sink on downgrades

The local share market made one of its strongest moves yet towards claiming an all-time high, with the ASX 200 breaking through resistance at 7,000 points. The ASX 200 gained 1% this week to finish on 7,063.50 points, led by miners from a range of different commodity sectors.

 

Which shares excelled?

Lithium stocks were again on the march as prices for the commodity keep building. Names like Galaxy Resources (ASX: GXY), Orocobre (ASX: ORE), Pilbara Minerals (ASX: PLS) and Vulcan Resources (ASX: VUL) all had promising weeks. Galaxy also released an update showing positive outcomes for its feasibility study regarding the Sal de Vida project in Argentina to become a low-cost battery-grade lithium carbonate producer.

Elsewhere, Zip Co (ASX: Z1P) and Sezzle (ASX: SZL) were both sharply higher this week as the buy-now pay-later segment wins over ‘risk-on’ investors once again. Zip also released its quarterly trading update, showcasing significant growth out of its US QuadPay operations. On the back of the news, the company also took the opportunity to raise capital via convertible notes and a placement, ultimately shoring up its balance sheet.

Brainchip (ASX: BRN) flirted with a $1 billion valuation after it announced it has begun volume manufacturing its Akida AKD1000 neuromorphic processor chip for edge AI devices. The chip will be produced by Taiwan Semiconductor Manufacturing Company after having leveraged the engineering expertise of Socionext to design the chip. Shares in BRN soared 13.9% this week.  It wasn’t the only semiconductor electronics company having a good week, as Altium (ASX: ALU) also fared well.

There was also strength among software players in the financial services space, with both Iress (ASX: IRE) and Hub24 (ASX: HUB) enjoying a prolific showing. Neither company released price-sensitive news to the market this week and the duo have seen their fortunes diverge significantly this last year.

Finally, a few other names on watch over these last few days were Eagers Automotive (ASX: APE), Bingo Industries (ASX: BIN) and Codan (ASX: CDA).

 

 

Which shares dragged on the market?

Whitehaven Coal (ASX: WHC) shares were one of the worst-performers across the market this week, with the stock diving 17.7%. The company reported that managed run-of-mine (ROM) coal production for the March quarter increased 12% versus the prior corresponding period, and that coal sales increased 7%. However, this was overshadowed by news that it was forced to reduce its FY21 guidance from the Narrabri mine from 5.3Mt to 5.5Mt to 4.5Mt to 4.9Mt on the back of poor weather and geological challenges.

Another company on the slide this week was Regis Resources (ASX: RRL) after it conducted an equity raising in light of signing a conditional binding agreement with IGO (ASX: IGO) to acquire its 30% interest in the Tropicana Gold Project for $903 million. With the raise conducted at $2.70 per share, the market wasted no time in pushing the stock towards this price, as it lost 14.9%.

The other major underperformer this week was Origin Energy (ASX: ORG). Shares in the energy business were slammed after management downgraded the company’s full-year earnings guidance amid low wholesale electricity prices and an adverse ruling on a gas price dispute. The stock has shed 9.7% since last Friday.

Meanwhile, Qantas (ASX: QAN) shares were on the back foot this week as vaccine delays weigh on the company. Even though the airline announced that its domestic flight capacity is now expected to be higher than previously flagged, investors remain cautious about the company sticking to a tentative October timeline for international travel when it appears the government has moved towards a year-end timeline for the now-delayed vaccine program.

Other shares that weighed on the market this week were Paladin Energy (ASX: PDN), Credit Corp (ASX: CCP), AMP (ASX: AMP) and TPG (ASX: TPG).

 

We’ll be back next week with another Weekly ASX Trading Wrap Up – until then, have a great week!

 

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