Strong performances from shares in the lithium and tech sectors helped underpin a modest weekly gain for the ASX. With lithium carbonate prices sitting near record levels, and tech buoyed by the Nasdaq, the benchmark ASX 200 index climbed 0.7% to finish on 7,415.50 points.
Which shares excelled?
Lithium stocks were this week’s biggest winners, with the sector coming to life as risk-on sentiment returned, and as lithium carbonate prices hit an all-time high last week. The price of the commodity touched 190,000 yuan/metric tonne, with battery-grade lithium producers directly poised to benefit.
Among the shares rallying this week were Lake Resources (ASX: LKE), Vulcan Energy Resources (ASX: VUL), Core Lithium (ASX: CXO), Liontown Resources (ASX: LTR), Orocobre (ASX: ORE) and battery metals tech firm Novonix (ASX: NVX).
Adding to the positive backdrop was a binding offtake agreement for Vulcan with global cathode manufacturer Umicore, with the aspiring zero-carbon lithium producer agreeing to sell up to 42,000 tonnes of lithium hydroxide between 2025 and 2029.
Meanwhile, Orocobre unveiled record lithium production at its Mt Cattlin project, comprising nearly 68,000 dry metric tonnes (dmt) of spodumene concentrate. It also upgraded its forecast production for CY21, lifting guidance from 195,000-210,000 dmt to 210,000-220,000 dmt, while reducing cost guidance from US$420-450 per tonne to US$390-420/tonne.
Turning to other sectors, tech stocks had a strong week, driven by a five-week high for the Nasdaq and all-time high for the S&P 500. With names like Tesla (NASDAQ: TSLA) and Apple (NASDAQ: AAPL) performing strongly, local investors also took to buying some of the ASX’s favourite tech names, including beaten-down trio Appen (ASX: APX), Nearmap (ASX: NEA) and Nuix (ASX: NXL), plus Altium (ASX: ALU). The S&P/ASX 200 Information Technology Index has rallied nearly 9% from its recent low, highlighting the broad-based recovery among tech stocks.
Eyes were focused squarely on natural gas producer Senex Energy (ASX: SXY) this week, with the company attracting a takeover bid from Korean steel giant POSCO International. With a bid valuing the company at over $800 million, or $4.40 per share, the stock gained roughly 18% over recent trading sessions. While POSCO has been granted access to conduct due diligence, the Senex board has suggested a higher bid may be necessary to receive the company’s blessing.
Immuno-oncology company Imugene (ASX: IMU) was also in favour this week as it dosed the first patient in its CHECKvacc clinical trial. The trial, taking place at the City of Hope cancer and research centre, will assess the safety and efficacy of its treatment against metastatic triple negative breast cancer, which affects as many as one-fifth of all patients with breast cancer. Shares in IMU surged nearly 6% this week.
Other top-performing stocks from recent trading sessions included Worley (ASX: WOR), Credit Corp (ASX: CCP), Paladin Energy (ASX: PDN) and Perpetual (ASX: PPT).
Which shares dragged on the market?
With coal prices soaring in recent times, it has prompted China to intervene within its domestic coal industry, rattling the share prices for Australian exporters like Yancoal (ASX: YAL), Whitehaven Coal (ASX: WHC) and New Hope Corporation (ASX: NHC). China’s National Development and Reform Commission (NDRC) flagged it will increase inspections while also raising the possibility it may set price limits and limit profit rates in order to stabilise thermal coal prices, arguing current prices have deviated from fundamental market conditions.
Although travel stocks received good news this week as quarantine arrangements look set to be dropped for fully-vaccinated inbound travellers to NSW and Victoria, that did little to help the share price of Flight Centre (ASX: FLT), which shed around 10%. During the week the travel agency announced the issue of $400 million in unsecured convertible debt for maturity in 2028, with a conversion price of $27.30 per share. This may have prompted some concerns around future upside on account of the prospect of dilution if shares are converted down the line.
A star performer in recent weeks, the share price of De Grey Mining (ASX: DEG) came unstuck as the company announced a capital raise. The gold explorer announced the successful completion of its fully-underwritten $125 million institutional placement, conducted at $1.10 per share. As is often the case when a company raises funds, the share price slumped towards the raise price, down 11%.
The resurgence in the share price of Woodside Petroleum (ASX: WPL) came to a halt this week, which followed the oil giant’s quarterly report. Despite third-quarter revenue climbing 19%, that was largely driven by higher energy prices, whereas the company’s delivered production fell by 2% on the quarter prior to 22.2 million barrels of oil equivalent.
Despite no price-sensitive news, a host of metal miners were lower this week, which may be partly attributable to investors rotating back into higher-growth plays across tech and lithium. Leading the losses were the likes of Mineral Resources (ASX: MIN), Alumina (ASX: AWC) and Sandfire Resources (ASX: SFR).
Also weighing on the market this week were Star Entertainment (ASX: SGR), Aurizon Holdings (ASX: AZJ), Australian Strategic Materials (ASX: ASM) and AVZ Minerals (ASX: AVZ).
We’ll be back next week with another Weekly ASX Trading Wrap Up – until then, have a great week!
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