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Morning Bell 14 March

Sophia Mavridis
March 14, 2022

Aussie shares ended the week in the red, down 0.9%, dragged down by a 3% fall in the tech sector. BNPL stock Zip (ASX:Z1P) was the worst performer on the ASX200, closed more than 8% lower. Xero (ASX:XRO) closed down more than 5%, while Altium (ASX:ALU) and lock (ASX:SQ2) were also lower. Meanwhile, utilities, energy and materials closed in the green.

The best performer on Friday was Allkem (ASX:AKE), which is the lithium producer formally known as Orocobre. Demand for lithium and electric vehicles has led to AKE’s share price growth over the last few years and on Friday the stock closed 5% higher. Incitec Pivot (ASX:IPL) and Nufarm (ASX:NUF) also lifted on Friday with the war in Ukraine causing a global shortage in fertiliser. The stocks gain 2.5% and 2%.

The most traded stocks by Bell Direct clients included Core Lithium (ASX:CXO), Lake Resources (ASX:LKE), ANZ (ASX:ANZ), Nickel Mines (ASX:NIC) and Rio Tinto (ASX:RIO).

In Europe, the European Central Bank delivered a hawkish surprise, to slow its bond purchases from the start of May, saying it may end its quantitative easing program altogether by the third quarter. However, economists had anticipated a more delayed withdrawal of monetary stimulus.

In the US, CPI data for February came in at 8%, the highest reading since January 1982. And despite expectations for cooling goods demand on the back of the post-COVID reopening: core goods CPI printed at 12% in the year through February, the highest since 1975. US equities closed lower. The Dow down 0.7%, the S&P500 down 1.3%, while the Nasdaq dropped 2.2%.

Locally today, the ASX200 is set to rise 0.28%, going by the SPI futures.

What to watch today:

  • In commodities, oil is trading higher, slightly above US$109 per barrel, however posted a 5.7% decline on the week. Gold is trading lower, just over US$1,984 an ounce, after retreating from a near record high earlier in the week. Investors weighed geopolitical uncertainties against a commodity-driven rise in inflation, prompting central banks to signal willingness to tighten monetary policy sooner. And seaborne iron ore is trading at US$155 a tonne.
  • Watch Chalice Mining (ASX:CHN), as the gold mining company is set to report its earnings.
  • Companies set to go ex-dividend today include Best & Less (ASX:BST), Pepper Money (ASX:PPM), SCA Property (ASX:SCP) and Suncorp (ASX:SUN).

Trading Ideas:

  • Bell Potter maintain their BUY rating on Doctor Care Anywhere (ASX:DOC), a UK- based telehealth company. Bell Potter have lowered their price target from $1.30 to $0.55, largely reflecting the re-rating of growth stocks in recent weeks. DOC last closed at $0.29, implying 89.6% share price growth in a year.
  • Trading Central have identified a bullish signal in gold miner Firefinch (ASX:FFX), indicating that the stock price may rise from the close of $0.80 to the range of $0.89 to $0.91, over 20 days, according to the standard principles of technical analysis.

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