ASX trades higher on gains in mining stocks, Silver Lake up 6%

The benchmark index ASX 200 continues its upwards trajectory at the close, after the Reserve Bank of Australia (RBA) upgraded GDP growth forecast and committed to remain “highly accommodative” until 2024. The benchmark is up 21.5 points or 0.30% to 7083, supported by gains in mining stocks. However, losses in tech and healthcare stocks restricted the gains. In the last five session, the index has climbed 0.82%.

On the sectoral front, seven of 11 sectors are trading in green, while Materials and Energy stocks continue to dominate market with solid gains. Other sector that are trading higher includes A-REIT, Financials, Energy, Telecommunications Services, Consumer Discretionary, and Consumer Staples.

Some of the worst performing sectors are Information Technology, Utilities, Health Care and Industrials.

The Reserve Bank of Australia (RBA) on Friday released quarterly statement on monetary policy, which confirmed the central bank’s upgrade to its gross domestic product (GDP) and employment forecasts remained intact. In the monthly policy meeting on Tuesday, the central bank had projected GDP to grow by around 4.75% over 2021 and 3.5% over 2022, while unemployment rate was pegged at around 5% by the end of 2021 and 4.5% by the end of the forecast period in mid 2023.

The apex bank repeated that it will not raise interest rates until actual inflation falls within its target range, which is unlikely to be until 2024 at the earliest.

Gainers and Losers

Among individual share, Silver Lake Resources Limited (ASX:SLR) was top gainer on ASX, rising over 6.4% to AU$ 1.915. The gold miner has gained, tracking cues from an overnight jump in bullion prices, as a weaker dollar and easing Treasury yields propelled the safe-haven metal over the key US$1,800 psychological level. Australian gold sub-index AXGD jumped as much as 3.2% on Friday, its highest since 28 April 2021.

Webjet Limited (ASX:WEB), Appen Limited (ASX:APX), Ramelius Resources Limited (ASX:RMS) and Evolution Mining Limited (ASX:EVN), were among other top gainers. 

Some of the top losers are Pro Medicus (ASX:PME), Nuix (ASX:NXL), CSR (ASX:CSR), Nearmap Ltd. (ASX:NEA) and Afterpay (ASX:APT). 

Shares in News

Regeneus Ltd (ASX:RGS) share price gained 4.35% to AU$0.12 after the company said it has managed to secure up to AUD 4.5 million in a three-stage placement of its ordinary shares to New Life Sciences Capital, a US-based investor. The company said that the placements will fund acceleration of work required to start ProgenzaTM Osteoarthritis Phase 2 trial in the US and for general working capital needs.

The share price of QuickFee Limited (ASX:QFE) gained as much as 42% to AU$0.355, on strong lending in the month of April. The digital lending firm says April lending in Australia hit a new high for FY21 at AUD 3.5 million, up 30% on the previous highest month in FY21, which shows signs of recovery in local business.

Shares of Emeco Holdings (ASX:EHL) trades 1.3% lower at AU$0.977. Financila research firm Jefferies expects Emeco to post earnings growth in FY22. The agency has forecasted free cash flow of AU$80 million in FY21-23, which is likely to be split between dividends, growth capex and deleveraging. Meanwhile, the company on Thursday approved capital management policy which would allocate 25%-40% of operating net profit after tax to be directed towards buybacks and/or dividends from 2H21 and beyond.

National Australia Bank Limited (ASX:NAB) trade flat with marginal gains after financial analysts raised concern that the bank faces risks from potential losses in business portfolio and higher costs. According to JP Morgan analysts, NAB's H1 result was disappointing vs their forecasts. Australia's third-largest lender NAB, reported a 10.3% drop in earnings from its business and private banking unit in March quarter.

Austal Limited (ASX:ASB) share price rose over 2% to AU$2.43 after the company cleared its stance on participation in a consortium that it is negotiating to buy the former Hanjin Heavy Industries shipyard at Subic Bay in the Philippines. The Company stated that it has made major investments in its Australasian shipyards including in the Philippines and is looking forward to expand further its operations. However, there is no certainty that any additional expansion will be either pursued or completed.

Cannindah Resources Limited (ASX:CAE) share price jumps 25% after latest results confirm presence of large gold intervals. The company has said that it has received the results of successful latest trenching and indicate presence of substantial gold intervals in almost all trenches, with higher grades coincident with the mapped structures.

Nearmap Ltd. (ASX:NEA) witnessed volatile trade on Friday, after falling 23% on Thursday amid report of legal proceedings against its US-based subsidiary in a patent infringement case. The company has denied the allegations by US rival Eagleview, stating that the patent infringement allegations are baseless. Eagleview on Wednesday claimed Nearmap had infringed eight patents and it shall claim damages for same.

White Cliff Minerals Limited (ASX:WCN) announced the results of reverse circulation (RC) drilling at the company's 100%-owned Reedy South Gold Project near Cue, Western Australia, on Thursday. In March 2021, the 6 hole 1,546m RC program was completed. Following the updates, the stock is up 29% at AU$0.022.

Commodity Market

In commodity market, Gold prices edge higher on Friday as the weaker US dollar propelled the precious metal, an inflation hedge, above the key US$1,800 an ounce for the first time in the last 10 weeks. Spot gold price was quoting at US$1,819 per ounce, up 0.23%.

Crude oil futures were trading higher during mid-morning trade in Asia May 7 as rising COVID-19 cases in India weighed on market sentiment. However, weak US dollar provided some support to oil price. Brent crude Futures were up 0.63% at US$65.12 a barrel, and the WTI crude Futures also rose 0.70% to US$65.16 a barrel. 

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