ASX hangs on to gains as iron ore & energy stocks lag, up 0.3% at 2pm

Australian shares have managed to hold on to its gains led by real estate, healthcare and consumer staples as investors focused on RBA governor Philip Lowe’s view that he doesn’t see a local recession coming after learning that Federal Reserve Chair Jerome Powell believes that navigating a soft landing would be difficult.

At 2pm AEST, the S&P/ASX 200 is 0.3 per cent or 18 points higher at 6,526. The SPI futures are pointing to a fall of 74 points.

Mr Powell in testimony to the Senate committed to getting inflation back down to the central bank’s target and tacitly accepted that aggressive interest rate hikes could cause a slowdown in economic growth describing a soft landing “very challenging.”

Resource stocks are the only sectors trading lower with the energy down 2.3 per cent and materials by 2 per cent. Fortescue Metals Group (ASX:FMG) is down 3.4 per cent to $17.02 while BHP Group (ASX:BHP) is trading 2.5 per cent lower to $40.01. Beach Energy (ASX:BPT) is down 3.3 per cent to $1.61 while Woodside Energy (ASX:WDS) is trading 2.8 per cent lower at $31.07.

Major banks are higher led by ANZ Banking Group (ASX:ANZ) up 1.7 per cent higher to $22.20 while Westpac Banking Corporation (ASX:WBC)and Macquarie Group (ASX:MQG) are both up 0.8 per cent.

Company news

After Bubs (ASX:BUB) sent two plane loads of its infant formula to America under an Operation Fly Formula Mission earlier this month, the US government has ordered another two plane loads to provide relief for American families. Shares are trading 2.7 per cent higher to 63.7 cents.

Evolution Mining (ASX:EVN) has selected MLG Oz (ASX:MLG) as its preferred service provider to service its Mungari operation in Western Australia for an initial term of 2 years, with a provision for a further 1-year extension at Evolution’s discretion. Shares in MLG Oz (ASX:MLG) are trading 10.8 per cent higher to 46 cents and Evolution Mining (ASX:ENV) is trading 2.5 per cent lower to $3.35 cents.

Beston Global Food Company (ASX:BFC) has inked a memorandum of understanding with KCG Corporation in Thailand. KCG is Thailand’s number one cheese and butter company with a large distribution channel in the hospitality industry. Shares are trading 45.6 per cent higher to 8.3 cents.

ArchTIS (ASX:AR9) has been awarded a $7 million contract with the Australian Department of Defence. This sale continues the company’s’ strong growth trend in the Defence and National Security market and follows the recent OneDefence win with KPMG to deliver the overall data security strategy for Defence. This is the largest sale in the company’s history and they are set to receive $3.44 million in recurring revenue over a two-year period and $3.59 million for services, support and hardware. Shares are trading 70 per cent higher to 17 cents.

PayGroup (ASX:PYG) has entered into a takeover deal with Deel Australia, a compliance and payroll platform. Deel is set to buy PayGroup by way of a scheme of arrangement for a cash consideration of $1.00 per PayGroup share, a 177 per cent premium to Wednesday’s closing price. Shares are trading 154.8 per cent higher to 93 cents.

Best and worst performers

The best-performing stock in the S&P/ASX 200 is Insurance Australia Group (ASX:IAG), trading 4.8 per cent higher at $4.49. It is followed by shares in James Hardie Industries (ASX:JHX) and Metcash (ASX:MTS).

The worst-performing stock in the S&P/ASX 200 is Lake Resources (ASX:LKE), trading 15.5 per cent lower at $0.71. It is followed by shares in St Barbara (ASX:SBM) and Liontown Resources (ASX:LTR).

Commodities and the dollar

Gold is trading at US$1834.78 an ounce.
Iron ore is 5.6 per cent lower at US$109.40 a ton.
Iron ore futures are pointing to a fall of 0.2 per cent.
One Australian dollar is buying 68.96 US cents.

Sources: Bloomberg, IRESS, UBS