ASX NEWS LIVE | ASX to Rise; Rio Tino Eyes Lithium Play with Arcadium Deal

Australian shares closed just shy of a record high, mirroring gains on Wall Street following a strong US jobs report that alleviated concerns about a potential recession in the world’s largest economy.

The ASX 200 closed up +0.68%, to 8,205.4, a mere 7 points below the all-time closing peak of 8,212.2 set in September.

Trading volume was generally lighter than usual due to the Labour Day holiday.

Despite this, 7 of the index’s 11 sectors finished positively, with technology (+1.64%) and financials (+1.54%) leading the gains.

The Big Four saw solid gains today; NAB surged +1.9% to $37.12, Westpac rose +2.2% to $30.78, ANZ was up +1.8% to $30.10, and Commonwealth Bank increased +1.5% to $134.77.

Arcadium Lithium was the standout performer, soaring +46% to $6.09 after Rio Tinto confirmed takeover talks with the dual-listed miner.

This marked Arcadium’s largest single-day gain since its formation in January. Meanwhile, Rio Tinto’s shares fell -2.5% to $121.17.

Rio’s bid boosted sentiment across the struggling lithium sector, where traders had built record short positions as lithium prices plummeted. The upward movement in stocks forced speculators to cover their short positions.

Other lithium stocks also saw significant gains: Liontown Resources jumped over 18% to 88 cents, Sayona Mining leapt more than 12% to 3.5 cents, Core Lithium rose over 8% to 12.5 cents.

Energy shares closed higher in volatile trading as oil prices consolidated substantial gains amid growing concerns about a wider Middle East conflict affecting oil supply. Brent crude dipped -0.5% to US$77.67 a barrel, and West Texas Intermediate fell -0.4% to US$74.12.

In other commodities, mining giants BHP rose +0.6% to $44.86, and Fortescue jumped +3% to $20.35, buoyed by rallying iron ore prices.

Speculation about additional stimulus measures from China’s top economic planner, expected to be announced at a Tuesday morning press briefing, fueled the gains.

The Iron ore futures in Singapore climbed +1.7%, surpassing the US$110 mark.

In other news today, gold miner West African Resources was the day’s biggest loser, plummeting nearly -20% as the company attempted to ease concerns investors had about recent comments from the Junta leader of Burkina Faso who threatened mining permits in a recent interview.

The lithium sector is today’s clear outperformer after Rio Tinto confirmed rumours that it had approached Arcadium Lithium with a non-binding takeover discussion.

You can read my article here for further details on the deal and what it means for the sector.

Rio Tinto’s stock is down -2.09% after the news, falling to $121.10 per share. In contrast, Arcadium is today’s standout gainer, up by +46.5% to $6.13 per share.

Meanwhile, the rest of the lithium sector has also seen solid gains today; here are some of the larger cap highlights on the ASX:

Mineral Resources is up by +4.5% to $53.30 per share.

Pilbara Minerals is up by +2.8% to $3.14 per share.

IGO is up by +2.65% to $5.81 per share.

Liontown Resources is up by +18.92% to $0.88 per share.

Vulcan Energy Resources is up by +8.7% to $4.57 per share.

Here’s their performance over the past 12 months. Click the stock ticker codes to navigate through:

Here’s the latest from our Fat Tail Daily video series. Another double day of videos for lucky viewers.

Publisher James ‘Woody’ Woodburn sits down with our editors to discuss the key trends traders are looking at and offer unique insights into market movements.

In the latest video, James spoke with Crypto Capital Editor Ryan Dinse.

You’ve probably heard of Sir Isaac Newton. His laws of gravity and physics set the standard for the modern scientific world. But you might not know that Newton also had a central role in creating the gold standard.

It’s a fascinating tale that only came out 200 years after Newton’s death. But what’s that got to do with today?

Quite a lot, actually. As Ryan explains, we’re going through a very similar process that saw the first banks back their currencies with gold. But this time, they’re adopting digital gold.

To read Ryan’s original article, click here.

Click below to watch the discussion.

Oil prices retreated in early trading today, following their most substantial weekly increase in over a year last week, as concerns about a potential region-wide conflict in the Middle East intensified.

Brent crude futures declined by 31 cents, or 0.4%, to US$77.73 per barrel this afternoon. Similarly, US West Texas Intermediate crude futures decreased by 20 cents, or 0.26%, to US$74.17 per barrel.

Last week saw significant gains, with the Brent contract rising over 8% on a weekly basis, marking its largest weekly increase since January of last year.

The WTI contract experienced an even more substantial gain of 9.1%week-on-week, its biggest surge since March of the previous year.

On Sunday, Israel conducted bombing raids on Hezbollah targets in Lebanon and the Gaza Strip, coinciding with the approaching one-year anniversary of Hamas’ October 7 attacks on Israel that sparked the current conflict.

Israel’s defence minister also indicated that all options for retaliation against Iran remained open. This development followed Iran’s missile attack on Israel last week, which was in response to Israel’s operations in Lebanon and Gaza.

Adding to the tension, Israeli police reported early today that Hezbollah rockets had struck Haifa, Israel’s third-largest city.

The next question remains what is OPEC+ likely to do with its planned supply cuts in the coming months.

Here’s the latest from our Fat Tail Daily video series.

Publisher James ‘Woody’ Woodburn sits down with our editors to discuss the key trends traders are looking at and offer unique insights into market movements.

In the latest video, James spoke with Strategic Intelligence Editor Nick Hubble.

Investors are turning to gold stocks as the yellow metal sets records.

Whether you count the last 3,000 years or two years, owning gold protects your purchasing power from inflation.

It worked for King Solomon, can it work for you today?

To read Nick’s original article, click here.

Click below to watch the discussion.

The Australian stock market opened on an upward trajectory this morning, with technology stocks leading the charge.

The ASX 200 is up 0.40%, reaching 8,183.5 points. Market activity remains subdued due to the Labour Day holiday observed across much of the nation.

Mining giant Rio Tinto saw a slight dip of -0.3% following confirmation of its interest in acquiring Arcadium Lithium.

In contrast, Arcadium emerged as the day’s top performer, with its shares skyrocketing 44% on the takeover speculation.

The technology sector stood out among the index’s 11 sectors, surging 1.2%, with Life360 experiencing a notable +3.6% increase.

Energy stocks also made gains, although these were tempered by lower oil prices in Asian trading.

Brent crude declined -0.6% to US$77.62 per barrel, while WTI crude dropped to US$74. This resulted in mixed performances from energy companies, with Santos slipping -0.2% and Woodside near flat at -0.08%.

Oil prices recorded their most significant weekly gain in over a year the previous week, driven by fears that Israeli or Iranian military actions in the region could disrupt critical oil infrastructure and transit routes, particularly the Strait of Hormuz, described as ‘the world’s most important oil transit choke point.

In the commodities sector, iron ore behemoth BHP advanced +0.4%, while Fortescue saw a more substantial rise of +2%.

Investors are closely watching Chinese markets as they resume trading after a week-long hiatus. Iron ore prices have been buoyed by optimism surrounding China’s economic outlook following recent stimulus measures.

Notable stock movements included a -2.3% decline for Florida-based investment firm GQG Partners, despite reporting $US2.2 billion ($3.2 billion) in inflows for September.

Healthcare imaging company Pro Medicus gained +1.5% after announcing a $98 million contract renewal with US-based Mercy Health at an increased transaction fee.

West African Resources fell -25% after the leader of the Junta in Burkina Faso threatened to revoke mining permits for multinationals in the country. WAF responded to the news today, saying that it is not aware of any plans that will affect its mining.

Gold miner West African Resources [ASX:WAF] has seen its shares fall by -25% in trading before they were halted today.

The plummet follows news from Burkina Faso, where WAF’s Kiaka Gold Project is located.

Over the weekend, the Military Junta controlling Burkina Faso made a vague threat to withdraw mining permits to multinationals.

Junta leader Ibrahim Traore said on Saturday:

‘We know how to mine our gold and I don’t understand why we’re going to let multinationals come and mine it,’ Traore said in a radio address to mark two years since he seized power in a coup.

While no mines were mentioned specifically, the news has been enough to send panic through WAF investors who have exited sharply today before the halt.

WAF said a further announcement is pending, although no timing was given.

Global mining powerhouse Rio Tinto [ASX:RIO] has confirmed the rumours by officially acknowledging its interest in potentially acquiring Arcadium Lithium [ASX:LTM].

The company released a statement confirming that it had made a preliminary approach to Arcadium regarding a possible takeover.

Rio Tinto emphasised that the current approach is non-binding, and there are no guarantees that the deal will materialise or progress further.

For its part, Arcadium Lithium corroborated Rio’s statement by informing the New York Stock Exchange of the approach.

This development signals Rio Tinto’s potential expansion into the lithium market, a crucial component in the production of electric vehicle batteries and renewable energy storage systems.

However, questions will remain about the recovery of the lithium market. Prices have remained near the bottom, currently around US$790 per tonne.

That low price caused Arcadium to suspend its Mt. Cattlin mine in early September, as its costs are around US$700 per tonne.

After the announcement, Arcadium shares are up by nearly $2 or 44% since last close, trading at $6.02 per share this morning.

Good morning. Charlie here,

ASX Futures signal a rise on what is likely going to be a quiet day as much of the country observes the Labour Day holiday.

The big news over the weekend was the latest US Jobs report showing stunning growth in September.

America added 254,000 jobs in September, well above the expected 140,000. Although most of that was from large government spending.

More than 60% of the growth for September came from the usual suspects — food and drink stores, health care, and government — that have all been the beneficiaries of fiscal largesse that has pushed the 2024 budget deficit to the brink of $2 trillion.

The unemployment rate also ticked lower from 4.2% to 4.1%, showing the resilience of the US economy. For many, the strength shown almost guarantees that the Fed’s next move is not another 0.5bps cut.

Despite the lack of further large cuts ahead, Wall Street rallied higher on Friday after the news. A ‘risk on’ mood took over, and many raised their bets that a soft landing was possible.

The Fed next meets November 6-7, until then we will be looking towards macro moves on our shores for a clear signal of the ASX’s direction until the end of the year.

The blowout jobs report sent the AUD lower, while oil prices also retreated from their recent highs as the conflict in the Middle East continued to simmer.

The big news we’ll be watching today on the ASX will be the M&A news of Rio Tinto approaching lithium giant Arcadium for a buyout deal.