The ASX has taken a leaf out of Wall Street’s overnight performance.
The S&P/ASX200 is up so far today, gaining 49.00 points or 0.67% to 7,362.90.
Over the last five days, the index has gained 1.76% and is currently 3.54% off its 52-week high.
The top-performing stocks in this index are Mesoblast Ltd (ASX:MSB) up 11.56% and Zip Co Ltd (ASX:Z1P) up 10.90%.
Afterpay hits back
After losing ground in the last few days, following the delay of its shareholder vote with regard to the Square merger, buy now, pay later giant Afterpay Ltd (ASX:APT) is back in the green today.
At time of writing Afterpay had gained 3.36%.
The gain could be on the back of Federal Treasurer Josh Frydenberg's payment reforms, including new protections for consumers and potential new regulation for the BNPL sector.
"Afterpay welcomes recognition from the government that a more holistic approach needs to be taken in relation to payments policy," an Afterpay spokeswoman said.
"We support any approach that takes into account consumer benefits from the innovation and competition Afterpay has brought to the market, including enabling a free instalment service to consumers who pay on time.
"We look forward to the Treasury and the Government taking a greater role in payments policy and to participating in the consultation process."
Oil Search and Santos rise
Energy giants Oil Search and Santos are both up more than than 3% to $4.23 and $6.77, respectively.
The rise is due to the PNG competition watchdog's clearance on their $21 billion merger.
Meanwhile, Woodside intends to invest $5 billion into new energy products by 2030.
“We expect LNG to remain an important part of the energy mix in our region for decades to come, both as a lower-carbon source of fuel for coal-dependent countries and as convenient firming capacity for renewables," Woodside CEO Meg O'Neill said at an investor briefing.
“But our significant investment target in new energy is aimed at positioning Woodside as an early mover in this evolving market and supporting the decarbonisation goals of our customers."
Woodside aims to build a low cost, lower carbon, profitable, resilient and diversified portfolio.
"Woodside aims to do this by leveraging our world-class Tier 1 portfolio and allocating capital to the right opportunities at the right time," O’Neill said.
"The core of our strategy is to invest in the new energy products and lower-carbon services our customers need as they decarbonise."
Don’t be wrong-footed by volatility
Amish Chamberlayne, head of Global Sustainable Equities, has delivered his reasons why investors should not be wrong-footed amid increased volatility in 2022.
“As was the case for much of 2021, we expect the 2022 market environment to be characterised by ongoing tensions between secular growth companies and the post-pandemic ‘reopening’ trade.
“To our mind, we believe that the powerful secular growth trends of digitalisation and electrification should dominate the market narrative over the next decade as decarbonisation of the global economy gathers pace.
“We expect heightened volatility, however, as the global economy contends with inflationary pressures stemming from the dislocations caused by the COVID-19 pandemic.”
Chamberlayne also said inflation would act as a tailwind for efficient businesses.
“When we consider the opportunities to sustainable equities in this environment, it is very important to remember that inflation often contains the seeds of its own destruction; higher prices incentivise businesses to invest in efficiency, substitution and technology.
“This can often make the economics of clean technologies, electric vehicles and renewable energy more attractive. We believe, therefore, that an inflationary backdrop will act as a tailwind to many of the businesses we invest in.
“In addition, we generally seek out companies with strong franchises which offer a compelling value proposition around their goods and services; because these types of companies should have pricing power which enables them to pass on higher input costs.”
Short-term flip-flopping
“It is important to remember that inflation is not synchronised. Rather, it tends to ripple through markets, creating volatility as different companies are impacted at different times and then recalibrate themselves," Chamberlayne said.
“As such, we expect to see market gyrations between value and growth from quarter to quarter as sectors are hit by inflation at different times.
"In the midst of this volatility, we urge investors not to be wrong-footed by the inevitable and short-term flip-flopping of growth versus value. In our view, the long-term secular trends associated with the transformation to a more sustainable global economy will be the most important determinant of investment returns.
“So, we believe a period of inflation may ultimately be beneficial to the growth of many of the names we are invested in as it makes the economics of sustainable businesses more compelling and accelerates the level of investment into the low carbon energy transition.”
On the small cap front
Red 5 Ltd (ASX:RED) is up 4.80%. RED is progressing well towards its scheduled first production from the King of the Hills Gold Project in the June quarter of 2022.
Core Lithium Ltd (ASX:CXO) is up 4.72%, having picked up six new mining leases next door to its advanced Finniss Lithium Project in the Northern Territory.
Alto Metals Ltd (ASX:AME) is up 4.76%. AME has highlighted the growth potential of Vanguard Camp with high-grade intercepts defining a new mineralised horizon within the Sandstone Gold Project in the East Murchison Mineral Field of Western Australia.
Future Metals NL (ASX:FME, AIM:FME) is up 4.52%. FME’s historical review shows broad, shallow PGM-nickel mineralisation of up to 20-40 metres in thickness outside of the current mineral resource estimate (MRE).
Emyria Ltd (ASX:EMD) is up 2.67%. EMD received positive vitro receptor screening results for the first batch of MDMA-analogues screened for neuroreceptor activity with major pharmaceutical development company, Eurofins.
Pantoro Ltd (ASX:PNR) is up 1.56%. PNR’s recent step-out drilling at Green Lantern mineral resource and ongoing expansion drilling at Scotia Deeps continue to impress with strong high-grade results.