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ASX up 0.45% at noon as oil prices surge by 2%

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2023-12-19

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Oil prices surged 2% due to increased attacks by Iranian-backed Houthi militants on vessels in the Red Sea, causing concerns about potential supply disruptions. This led major shipping companies, including BP, to temporarily halt transit in the area. Meanwhile, global markets reacted cautiously to mixed signals from the US Federal Reserve regarding the timing of the first interest rate cut, and the Reserve Bank of Australia's upcoming release of board meeting minutes was closely watched for potential hints of rate changes.

At noon, the S&P/ASX 200 is 0.45 per cent higher at 7,460.10.

The SPI futures are pointing to a rise of 21 points.

Best and worst performers

All sectors are in the black. The best-performing sector is REITs, up 0.79 per cent. The sector with the fewest gains is Consumer Staples, up 0.03 per cent.

The best-performing large cap is Meridian Energy (ASX:MEZ), trading 3.33 per cent higher at $4.97. It is followed by shares in IDP Education (ASX:IEL) and Pro Medicus (ASX:PME).

The worst-performing large cap is Qantas Airways (ASX:QAN), trading 1.83 per cent lower at $5.36. It is followed by shares in Pilbara Minerals (ASX:PLS) and AGL Energy (ASX:AGL).

Asian news

Asia-Pacific markets were set for a mixed open as investors brace for the Bank of Japan’s final rate decision for 2023, as well as minutes from the Reserve Bank of Australia’s December meeting.

The BOJ is expected to stick with its negative interest rate policy, according to a Reuters poll of economists. Investors will be watching out for the BOJ’s stance on its yield curve control policy.

The RBA’s minutes will detail its rationale for holding rates at its December meeting, where it kept the benchmark interest rate steady at 4.35%

Japan’s Nikkei 225 slipped 0.14%, while the Topix was down 0.24%

South Korea’s Kospi was also 0.28% lower, while the small-cap Kosdaq fell marginally after hitting its highest level since Sept. 22 on Monday.

Futures for Hong Kong’s Hang Seng index stood at 16,541, pointing to a weaker open compared twith the HSI’s close of 16,629.23.

Company news

Lake Resources (ASX:LKE; OTC:LLKKF) announced its Phase One DFS for its Kachi lithium brine project in Argentina. The project boasts a post-tax NPV8 of US$2.3 billion and an internal rate of return of 21%. The project targets annual average EBITDA of US$635 million and EBITDA margin of 76%. Shares are trading 7.69 per cent higher at 14 cents.

Lithium Universe (ASX:LU7) reports excellent progress of the Engineering Study by Hatch on the Company’s Québec Lithium Processing Hub multi-purpose battery-grade lithium carbonate refinery. The Refinery is rated at 16,000 tpa with an assumed feed grade of spodumene at or around 5.5% Li2O. Shares are trading 2.86 per cent lower at 3.4 cents.

Culpeo Minerals (ASX:CPO, OTCQB:CPORF) reported significant widths of visible copper mineralisation have been intersected at very shallow depth at the El Quillay Prospect, Fortuna Project Chile. The samples are to be dispatched for laboratory analysis, with assay results expected in January 2024. Shares are trading 40 per cent higher at 4.2 cents.

Sunstone Metals (ASX:STM) announce outstanding high-grade gold exploration results ~1km away from the Limon Central Shoot at its Bramaderos project in southern Ecuador. In response, Sunstone Managing Director Malcolm Norris, “such positive results early in an exploration program give you confidence that this will be large system with widespread gold and silver from surface.” Shares are trading flat at 1.3 cents.

Commodities and the dollar

Gold is trading at US$2041.20 an ounce.

Iron ore is 1.2 per cent lower at US$133.95 a tonne.

Iron ore futures are pointing to a 0.1 per cent fall.

One Australian dollar is buying 67.06 US cents.

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