ASX closes higher as materials lead
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The news: The Australian sharemarket has closed higher, with materials leading gains after the federal budget unveiled a slate of initiatives to boost the critical minerals sector.
The numbers: The benchmark ASX 200 closed up 0.35% to 7,753.7, with eight out of 11 sectors finishing in green.
The best performing sector was materials, up 1.19%, followed by healthcare (0.8%) and consumer discretionary (0.76%).
Critical mineral investors cheered after the federal budget included a 10% production tax credit totalling $7 billion over 10 years to drive processing and refining in Australia. Arcadium Lithium (3.11%), Iluka Resources (2.29%), Lynas Rare Earths (1.54%), Liontown Resources (1.45%), and Pilbara Minerals (0.5%) all ended higher.
Mining giant BHP gained 2.48% following remarks by its CEO Mike Henry who said it was up to investors to decide on whether the BHP or Anglo American management team would be in a better position to reap value from the companies’ respective restructuring plans. Anglo American announced on Tuesday that it would demerge from its platinum and diamond businesses. Morningstar analysts today noted that BHP’s pursuit of Anglo American was starting to look expensive.
Battery technology company Novonix finished 3.03% higher after signing a testing and development agreement with PowerCo SE, the battery cell subsidiary of Volkswagen Group.
The top performer across the ASX 200 was IDP Education (7.12%) which is set to be included in the MSCI Global Small Cap Indexes, along with MMA Offshore, SG Fleet Group, Wai Resources, and Zip. Pro Medicus, up 3.21%, has been moved from the small cap indices to MSCI Global Standard Indexes. The changes will take place at the close of 31 May.
The worst performing sector was industrials, down 0.63%, followed by energy (-0.54%) and financials (-0.25%).
Iress shares ended 1.19% lower after announcing that a data breach led to unauthorised access to OneVue’s platform.
Karoon Energy finished down 1.31% following the disclosure that its second-largest shareholder Samuel Terry Asset Management would vote against five of the nine resolutions at its upcoming annual general meeting.
Southern Cross Media ended flat while ARN Media fell 0.59% after Southern Cross rejected ARN’s latest takeover bid.
The context: The latest US CPI figures will be released tonight while Thursday will see the Australian Bureau of Statistics release the latest unemployment rate figures.
Thursday will also see Aristocrat Leisure, Graincorp and IPL post earnings while Atlas Arteria holds its AGM.
