The ASX pared back some of its early losses, but is still trading in the red today.
By midday, the S&P/ASX200 had dropped 62.20 points or 0.87% to 7,113.60, setting a new 50-day low.
The index has lost 4.09% for the last five days but has gained 4.61% over the last 52 weeks.
Bottom-performing stocks in this index are so far Regis Resources Ltd (ASX:RRL) down 14.17% and Liontown Resources (ASX:LTR) Ltd down 6.64%.
Regus lowered its full-year production guidance due to a geotechnical incident and other operational challenges, while Liontown led a lithium stock downturn: Pilbara Minerals Ltd (ASX:PLS) lost 4.8% and Allkem Ltd dropped 4.6%.
South32 declined 6.1% to $3.84 following its quarterly results.
Adairs has also been knocked about after the homewares retailer warned its first-half profit would sink to almost half of the year-earlier period due to lockdowns and higher costs. Adairs slumped 18%.
More on Fortescue’s acquisition
Even Fortescue dropped after it announced it had acquired Williams Advanced Engineering (WAE), as we reported this morning. The mining giant lost 2.4% in morning trading.
WAE is an offshoot from the Williams F1 team founded by the late Sir Frank Williams and is a world-leading technology and engineering business renowned for projects in high-performance battery systems and electrification.
WAE will bring its race-bred critical battery technology to FFI, which will, in turn, enable Fortescue to realise its industry-leading 2030 net-zero target. The companies will work together to help bring green energy to life in programs such as Fortescue’s 3-kilometre long freight trains, 400-tonne haul trucks and industrial heavy mobile equipment.
Fortescue founder and chairman Dr Andrew Forrest AO said, “This is the race of our lifetimes - the race to save the planet from cooking. The speed at which we move matters. Together FFI and WAE will work to decarbonise Fortescue – with the aim of achieving that faster and more effectively than anyone else in the world.
“This is an historic moment in the future of our company as we welcome the WAE family into the Fortescue family to work together to decarbonise heavy industry and hard to abate sectors for the good of our planet, and the benefit of our shareholders.
“This announcement is the key to unlocking the formula for removing fossil fuel-powered machinery and replacing it with zero carbon emission technology, powered by FFI green electricity, green hydrogen and green ammonia.
“For decades, Sir Frank Williams’ F1 racing business was at the forefront of innovation in engineering and I thank him for his pioneering vision in founding WAE over a decade ago. I was sorry to hear of his passing last year and I pay tribute to him. I have huge respect for him, his family and the Williams’ business,” Forrest said.
Former deputy team principal of the Williams F1 Racing Team, Claire Williams OBE, welcomed today’s announcement.
“Since the team sold a majority shareholding in WAE to EMK Capital a couple of years ago, EMK and the management team have done a fantastic job in taking the business forward.
"We are delighted that Fortescue is now taking over that mantle and see the value in the company and its people in tackling some of the biggest issues facing our world today. I am sure that they will continue to drive considerable success through the business and achieve further results in decarbonising heavy industry and tackling the issue of global warming.”
WAE CEO Craig Wilson said, “High-performance battery and electrification systems are at the core of what we do at WAE, and this acquisition and investment will enable the company’s further growth to support the delivery of zero-emission products and services across existing sectors – such as automotive, motorsport and off-highway – and new sectors too.
"This will benefit all of our stakeholders along with current and future customers who are very important to us. My thanks also to EMK Capital for their support during the past two years that has enabled us to accelerate the successful progress of WAE and development of technologies to help tackle climate change.
“We are delighted to play a key role in Fortescue’s decarbonisation strategy, contributing to the delivery of their emissions reduction targets through high-performance battery systems, green hydrogen and related technologies. We will also be focusing on addressing the sector-wide challenges in the off-highway sector.
"Both companies have a shared culture of innovation, setting and achieving challenging objectives and a genuine commitment to creating a sustainable future.”
Fortescue CEO Elizabeth Gaines said, “Fortescue and WAE share strong cultural alignment with a focus on technology and innovation to support carbon neutrality, both companies being leaders in their respective industries.
“We look forward to working together to apply this technology-first strategy to our emissions reduction pathway while also empowering the highly capable WAE team to achieve growth opportunities in new products, services and markets.
“We have been working with WAE since early 2021, with WAE designing and building a battery system to power an electric mining haul truck; an important first step in the decarbonisation of Fortescue's mining haul fleet. WAE’s expertise in battery systems and electrification further complements FFI’s green hydrogen projects for haul trucks and mobile fleet to further underpin our technical leadership.”
FFI CEO Julie Shuttleworth AM said, “The acquisition of WAE adds cutting edge technology, intellectual property and engineering capabilities to support and accelerate FFI’s Green Fleet technology pathway. Under Fortescue’s ownership, WAE will continue to service its customers while rapidly expanding its battery and electrification technologies, engineering and manufacturing offerings.
“Rapid growth of WAE’s world-leading technology and engineering business and an expansion of its manufacturing footprint further enhances FFI’s position to become a major player in the global market for decarbonisation of the global heavy industry sector.
“Joining the Fortescue family will also allow WAE to invest in new technologies and to further commercialise world-leading electrification products in new markets. It is also an opportunity to continue to grow the Williams’ family vision of creating cutting edge technology operating at the forefront of innovation in engineering and business.”
Why the market isn't crashing
As we do each Monday we asked Wealth Within founder and analyst Dale Gillham about his views on the market.
“Throughout January, the US stock market has been falling away with the Dow Jones Index down around 4% while the S&P500 is down around 5% and the Nasdaq down over 8%. Many experts are suggesting that this current weakness is an indication that these markets are crashing, but is this really the case?
“While I agree that the US market is in a correction, this is vastly different to it crashing. I would also warn investors not to put too much attention on the noise that we hear from experts because it can be misleading. Let me explain.
“There is a vast difference between a forecast and a prediction, which investors typically misunderstand. A forecast is what an expert believes will occur in the future based on what we know today. That said, we have no control over the macro elements that affect the economy such as COVID, interest rates or Government decisions that may affect the market. As such, we may change our forecast as new information comes to light, which may result in the original forecast changing.
“A prediction, on the other hand, is a definite statement that something will occur in the future and this is where investors tend to make mistakes because all too often they make their investment decisions based on what they believe is a prediction rather than what might occur.
“Let me share a story about one investor who contacted me in the last week and remarked: ‘Unfortunately, I have watched too many US YouTube shows and as a result, early last year I pulled nearly 700k out of the stock market and put it into cash based on their outlooks; ie markets are in a bubble, stocks overpriced, mega crash coming’. The investor went on to say that being in cash for the last year resulted in them missing out on the gains they would have otherwise achieved in our market.
“Given that the Australian and US markets have been falling over the past few weeks, investors have been looking to experts for answers. Let me be clear, right now the markets are not crashing, we are simply experiencing a normal cyclical correction and, as such, the S&P500 may fall 15% or slightly more from its previous high.
“An important piece of advice that investors need to remember: you do not buy an index, instead you buy stocks. Therefore, regardless of what the market is doing, investors should only ever buy or sell based on what the stock is telling them.”
On the small cap front
Cooper Metals Ltd (ASX:CPM) is up 7.55% after kicking off a high-powered fixed loop ground electromagnetic survey (FLEM) over Python and King Solomon copper-gold prospects in the north-eastern portion of the Mt Isa East Project in north-western Queensland.
Tietto Minerals Ltd (ASX:TIE) is 6.12% higher. TIE has recorded a project-best intersection of 1.1 metres at 2,853 g/t gold within 25.37 metres at 131.05 g/t during infill drilling on the main Abujar shear at its 3.35-million-ounce Abujar Gold Project.
Kinetiko Energy Ltd (ASX:KKO) has gained 5.88%. KKO is moving towards helping to service energy-hungry South Africa from its Korhaan Project with all wells intersecting gas, giving the company a 100% success rate in gas discovery.
Arovella Therapeutics Ltd (ASX:ALA) is 2.56% higher after receiving firm commitments from institutional and sophisticated investors to raise $4.57 million.
Solis Minerals Ltd (TSX-V:SLMN, ASX:SLM) (NYSE:CDI) has gained 2.50%. SLM has commenced diamond drilling operations at its flagship Mostazal Copper Project, 80 kilometres northeast of Copiapo, Chile, and within the Domeyko fault — a major structural control for some of the world's largest and most productive copper mines and 40 kilometres south of Codelco's El Salvador mine.
Marvel Gold Ltd (ASX:MVL) is up 1.69%. MVL has appointed former executive director of exploration Chris van Wijk as the company's managing director.