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Morning Bell 5 April

Sophia Mavridis
April 5, 2022

Investors played it safe yesterday and traded cautiously, following the news that Germany is pushing for discussions with the European Union to ban Russian gas imports. This may lead to energy rationing in Europe and would push prices higher.

The market closed slightly higher yesterday, with utilities, materials and tech making the most gains. It was a profitable session again for mining stocks: BHP Group (ASX:BHP), Fortescue Metals (ASX:FMG) and Rio Tinto (ASX:RIO) were all in the green. And lithium miners such as Allkem (ASX:AKE), Mineral Resources (ASX:MIN), Liontown Resources (ASX:LTR) and Pilbara Minerals (ASX:PLS) were all higher. Gold miners also gained, even while the gold price was lower. Financials closed 0.3% lower yesterday, as the four major banks lost ground. While Magellan Financial Group (ASX:MFG) is finally picking back up again, yesterday reaching a 1-month high. Its shares lifted with help from the biggest mover on the ASX200 yesterday, investment manager Pendal Group (ASX:PDL), which rose 18% after receiving a $2.4 billion takeover bid from Perpetual. Perpetual’s share price however, declined the most yesterday. Iluka Resources (ASX:ILU), also gained following the approval of its $1.2 billion refinery in Eneabba in Western Australia, and this will be the first fully integrated, rare earths separation facility in Australia.

The most traded stocks by Bell Direct clients yesterday included Commonwealth Bank (ASX:CBA), Core Lithium (ASX:CXO), Pilbara Minerals (ASX:PLS) and NOVONIX (ASX:NVX).

Overnight, US equities were in the green. The Dow was up 0.3%, the S&P500 up 0.8%, while the Nasdaq rallied 1.9%.

What to watch today:

  • Off the back of a strong rally across global markets, the Australian market is set to rise 0.67% at the open this morning, according to the SPI futures.
  • In economic data, at 2:30pm today (AEST), the RBA will announce its interest rate decision, which is expected to remain unchanged at 0.1%.
  • In commodities, the oil price is trading more than 4% higher, with the possibility of more sanctions on Russia.
  • Seaborne iron ore has extended its gain. And the gold price is also higher, following last week’s fall.

Trading Ideas:

  • Bell Potter maintain their Speculative Buy rating on De Grey Mining (ASX:DEG) and have lowered their valuation to $1.72. Bell Potter also have Hold rating on Gold Road Resources (ASX:GOR) with a $1.70 price target, and a Speculative Hold rating on DGO Gold (ASX:DGO) with a valuation of $4.37.
  • Trading Central have identified a bullish signal in Black Rock Mining (ASX:BKT), indicating that the price may rise from the close of $0.27 to the range of $0.31 to $0.33, over 35 days, according to the standard principles of technical analysis.

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