The ASX gained sharply in morning trading with the S&P/ASX200 gaining 119.10 points or 1.62% to 7,477.40, despite crossing below its 125-day moving average.
Over the last five days, the index has gained 0.44% and is currently 2.04% off its 52-week high.
The top-performing stocks in this index at time of writing are Unibail-Rodamco-Westfield up 6.24% and Medibank Private up 5.29%.
Property, financial and energy stocks have led today’s gains, while the A-REIT was the best performing sector, up 2.13%.
Tech rebounded from its 6.4% fall yesterday –its worst session since February 2021.
On the downside was James Hardie, which fell 3.1% after the company’s CEO was fired for inappropriate code of conduct.
Australian Pharmaceutical Industries (ASX:API) dumped 12.6% after Woolworths Group pulled out its acquisition offer.
Woolworths withdrew its offer after completing due diligence. It had proposed to acquire API at a cash offer price of $1.75 a share, however, said it could not validate the financial returns it requires in line with the group’s capital allocation framework.
“We are grateful to the board and leadership team of API for their constructive engagement and support throughout the due diligence process,” Woolworths chief executive Brad Banducci said.
Wesfarmers bid is still on the table at $1.55 a share.
What happened to James Hardie CEO?
James Hardie CEO Jack Truong has had his employment terminated immediately, with his work-related interactions coming into question.
Truong was with the company from February 2019 to present. He is accused of breaching the company’s Code of Conduct after exhaustive due diligence by outside counsel and a third-party consultant to support behavioural change.
However, based on initial and additional employee complaints, the company had no choice but to sack him.
Truong loses his on-foot incentives, including unvested LTI. He will receive only statutory entitlements.
Harold Wiens will be appointed interim CEO while a succession plan is implemented.
The Fed could raise rates by March
Rumour has it that the US Federal Reserve could raise interest rates as soon as March while shrinking its balance sheet as it fights rising inflation.
“The FOMC could begin increasing the policy rate as early as the March meeting in order to be in a better position to control inflation,” Federal Reserve Bank of St Louis president James Bullard said to the CFA Society St Louis on Thursday.
“Subsequent rate increases during 2022 could be pulled forward or pushed back depending on inflation developments.”
Bullard is one of the more hawkish policymakers and he along with other Fed policymakers believe a stronger economy and higher inflation could warrant rate hikes “sooner or at a faster pace”.
On the small cap front
MGC Pharmaceuticals Ltd (LSE:MXC, OTC:MGCLF, ASX:MXC) is up 12.2% after the ArtemiC Rescue food supplement was granted import approval in India, opening a potentially significant new market for the bio-pharma company.
Noxopharm Ltd (ASX:NOX) is up 6.25%. NOX has strengthened its cash balance with a A$5.865 million Federal Government research and development (R&D) rebate.
Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF) is 3.88% higher. RCE received positive data from a Phase I intravenous clinical trial of RECCE® 327 (R327), demonstrating safety and tolerability amongst nine healthy male subjects in the first cohort.
American Rare Earths Ltd (ASX:ARR) is 2.94% higher having appointed Sten Gustafson, who has advised on more than 100 corporate transactions around the world for in excess of $100 billion of transaction value, as a non-executive director.
Imugene Ltd (ASX:IMU, OTC:IUGNF) is 2.78% higher after receiving a cash boost in the form of a A$6.54 million R&D tax incentive.