The Monday Report – 13 September 2021

Daily Market Reports | Sep 13 2021

By Greg Peel

Miner Victory

I suggested on Friday that Thursday’s big sell-off was exacerbated by buyers standing aside to let sellers do their thing, such that the following day would see a bounce as buyers moved in on cheaper prices. Having fallen -140 points on Thursday, the ASX200 opened up 60 points on Friday.

But not for long. The bounce lasted all of ten minutes and by lunchtime the index was up only 10 points. So the buyers had another go, and split the difference at 37 points by the close.

The resources sectors were the primary drivers, with materials up 1.7% on surging prices for aluminium, copper and nickel in particular, defying ongoing weakness in iron ore. Nickel Mines ((NIC)) topped the index leaders’ board with an 8.5% gain, followed by Alumina Ltd ((AWC)), South32 ((S32)), Mineral Resources ((MIN)) and mining contractor Monadelphous ((MND)) to round out the top five.

Even Fortescue Metals ((FMG)) managed a 2.6% comeback from Thursday’s selling.

Energy was next best with 0.9%, on stronger oil prices but also confirmation the merger of Santos ((STO)) and Oil Search ((OSH)) will proceed, to form Australia’s biggest oil & gas company, elbowing out incumbent Woodside Petroleum ((WPL)). Analysts see the merger as mutually beneficial. Woodside shareholders are not quite as enamoured with the BHP Petroleum merger.

Despite resource domination, all sectors closed in the green bar a slight dip for property, and a -0.7% drop for healthcare, which tends to be in and out of favour on daily basis at present, beyond just currency moves.

News that regional Victoria was to come out of lockdown helped to lift sentiment on Friday, suggesting there may be some light at the end of the tunnel. Vaccination rates are finally surging, and the 70/80% double-dose targets are looking a lot more achievable.

Let the debate now rage over vaccination passports and the legality of mandating them across the economy.

On Friday night base metal prices surged once more, and the oils were up again but iron ore slipped further. Wall Street nevertheless closed the week on a sombre note, and our futures were down -28 points on Saturday morning.

The run of ex-dividends continues this week but all the biggies are now pretty well past us.

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