The ASX is higher today.
The S&P/ASX200 gained 31.40 points or 0.45% to 7,063.90, crossing above its 125-day moving average. Over the last five days, the index has gained 0.70%, but is down 5.04% for the last year to date.
The top performing stocks in this index were Pointsbet Holdings Ltd up 8.43% and carsales.com Ltd up 5.59%.
On the small cap front, Core Lithium Ltd (ASX:CXO) finished 9.52% higher after it kicked off a reverse circulation (RC) drilling campaign to gain ground on the Finniss Lithium Project.
What’s making news today
China bucks the rates trend
China has bucked the global trend of increasing the cash rate, with the country’s central bank lowering the rate as it looks to boost economic growth.
The move comes ahead of the release of major economic indicators and after the economy slowed in July due to Covid-related challenges.
The one-year medium-term lending facility (MLF) and seven-day reverse repurchase agreements have been cut by 10 basis points, while injecting liquidity via the two instruments. The MLF rate was cut to 2.75% and the seven-day reverse repo rate was cut to 2%.
The move could lead to a lowering of China’s benchmark lending rates – the Loan Prime Rate – later this month.
The central bank also injected 400 billion yuan ($59.3 billion) liquidity via the one-year MLF and CNY2 billion via seven-day reverse repos on Monday.
The National Bureau of Statistics reported industrial production to be 3.8% from a year earlier, down slightly from the 3.9% increase in June. That’s 4.5% short of the growth expected by economists polled by The Wall Street Journal.
"The risk of stagflation in the world economy is rising, and the foundation for domestic economic recovery is not yet solid," the NBS warned in a statement.
"July’s economic data is very alarming," Raymond Yeung, Greater China economist at Australia and New Zealand Banking Group (ASX:ANZ), told Bloomberg TV.
"The Covid Zero policy continues to hit the service sector and dampen household consumption."
At 0.4% year-on-year growth in the second quarter, this was the slowest rate since the initial Covid outbreak.
Today’s reporting spotlight: BHP
BHP Group Ltd (LSE:BHP, ASX:BHP) releases its FY numbers tomorrow.
Here’s market analyst at City Index Tony Sycamore’s take.
“A multinational mining and metals company, BHP is headquartered in Melbourne and is the largest listed company on the ASX with a market capitalisation of $195 billion.
“After consolidating its dual-listed structure earlier this year, the company accounts for about a 10% weighting in the ASX200. BHP will report its Full Year numbers on Tuesday, August 16, at 8.30 am Sydney time.
“For the first half of the year, BHP announced an underlying profit of US$9.7 billion and a $US1.50 per share interim dividend. The bumper result came from surging prices and demand for its key commodities, including iron ore, copper, coal and nickel.
“However, since April, commodity prices have slumped, including a 35% fall in the price of iron ore, and similar for copper. Zinc prices have halved, as have coking coal prices. On the other side of the ledger, the company faces higher costs from supply chain constraints and a tight labour market, compounded by the deepening woes in China's real estate sector.
“The mixed outlook for commodities has already seen rival mining heavyweight Rio Tinto disappoint investors this earnings season as it declared a smaller dividend than expected and no special dividend at all.
“Earlier this week, BHP launched an $8.4-billion bid for copper miner OZ Minerals. The $25-per-share bid was pitched at a 32% premium to OZ Minerals' last traded price at $18.92, a signal that the Big Australian holds an optimistic view of the global economy. The OZ Minerals board rejected the bid, and the market now waits to see if BHP will come back with a revised offer.
“For the record, the expectation is for BHP to report an underlying net profit of US$20.4 billion, up 19.3% for Full Year 2021.
“In early July, the share price of BHP extended its decline from the April double top (at $47.90) to more than 25% as it breached a band of solid support between $40.00 and $39.00.
“The break of support at $40.00/$39.00 leaves the share price vulnerable to a retest of the July $35.85 low and it needs to reclaim $40.00 to provide a more favourable backdrop."
The Five at Five
Silver Mines hits up significant new drill targets from seismic survey at Bowdens
Silver Mines Ltd (ASX:SVL) now hopes to complete a drilling program of 3,000 metres testing priority targets in the immediate vicinity of the Bowdens Silver Deposit.
Creso Pharma subsidiary appoints renowned sports performance coach as brand ambassador ahead of product launch
Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF)'s hemp-derived CBD product helps athletes reduce muscle and joint inflammation without the use of heavy narcotics or prescription pharmaceuticals.
Perpetual Resources’ test work produces 34% reduction in iron impurities at the Beharra White Sand Project
“To maintain such high levels of silica content and to confirm such significant reductions in iron content positions Beharra to service the high-growth glass markets of Asia," Perpetual Resources Ltd (ASX:PEC)'s executive chair Julian Babarczy said.
Suvo Strategic Minerals advances talks with C&D Logistics Group for kaolin commercial offtake agreement
C&D has agreed to accept delivery of 20 tonnes of two high-quality water-washed kaolin products from Suvo Strategic Minerals Ltd (ASX:SUV)’s 100%-owned Pittong plant in Victoria for various commercial-scale trials.
Peninsula Energy’s definitive feasibility study positions Lance projects as globally competitive ISR uranium operations
“Importantly, the findings have re-affirmed that Peninsula possesses a globally competitive uranium production centre at the Lance projects and that the pathway back to production for Lance is well defined and low risk," Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF)'s MD and CEO Wayne Heili said.
On your six
Of the 100 best-performing companies across the 2022 financial year, 97 of them more than doubled their share price. That’s despite the bumpy ride global financial markets have delivered.
These were the 100 best-performing companies in FY22
It’s been a bumpy ride for investors and companies alike, but as always, there are success stories to be found, and the ASX had plenty.
The one for good luck
Inheriting shares: the tax implications
Beware the tax implications of inheriting shares: although there is no immediate capital gains tax (CGT) following a death, you will face a CGT bill when you sell the shares.