Closing Bell: Hot run ends for ASX as trade war impacts emerge

Between US debt being downgraded to AA1 by Moody’s and a slowdown in China’s economy, the ASX has broken an eight-day winning streak to fall 0.58pc.

The ASX's run finished with a face plant on Monday, falling more than 0.5pc. Pic: Getty Images

• US government debt was downgraded from AAA to AA1

• Iron ore falls as data out of China shows weakening growth

• Gold climbs 0.62pc to US$3223/oz

After eight days of gains the ASX has finally stumbled, ending the day down 0.58%.

It’s unlikely to be a particularly cheery day in the US or Europe this evening, either, with S&P500 futures down more than 1% and UK FTSE100 futures down 0.44%.

Now that the relief from the US-China trade war ceasefire has worn off, structural indications of the tariff’s effects are beginning to make themselves known.

Moody’s downgrades US debt

Moody’s downgraded the US government debt rating from AAA to AA1, drawing the strength of the US dollar into doubt and driving treasury yields higher by three basis points.

“Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat,” Moody’s said in its press release.

“In turn, persistent, large fiscal deficits will drive the government’s debt and interest burden higher. The US’s fiscal performance is likely to deteriorate relative to its own past and compared with other highly rated sovereigns.”

Adding to the ASX’s woes, China isn’t faring particularly well, either.

The latest economic data out of Beijing shows weakening retail sales in April, as well as a 10.3% drop in property investment – not a good sign for the struggling Chinese steel industry, or our own iron ore sector.

In fact, iron ore has fallen 0.56% today, slipping below the US$100 per tonne mark to sit at US$99.50.

That cut the legs out from under the resources sector, with Materials falling more than 1.5%.

Source: Market Index

As always, the market giveth and the market taketh away.

With the increasingly gloomy sentiment came a rotation back into gold, which has lifted 0.62% today to touch US$3223 per ounce.

That gave the ASX All Ords Gold Index some love, driving it up 2% to make it the only index in the green on the ASX.

Source: Market Index

ASX SMALL CAP LEADERS

Today’s best performing small cap stocks:

Security	Name	Last	% Change	Volume	Market Cap
RDN	Raiden Resources Ltd	0.0065	63%	72630135	$13,803,566
XAM	Xanadu Mines Ltd	0.078	53%	60640475	$97,522,075
BP8	Bph Global Ltd	0.003	50%	977859	$2,101,969
EDE	Eden Inv Ltd	0.0015	50%	86750	$4,109,881
PIL	Peppermint Inv Ltd	0.003	50%	854216	$4,475,279
TKL	Traka Resources	0.0015	50%	845452	$2,125,790
NSX	NSX Limited	0.032	45%	2387863	$11,075,006
SFG	Seafarms Group Ltd	0.002	33%	100246	$7,254,899
SIS	Simble Solutions	0.004	33%	514408	$2,628,991
ADY	Admiralty Resources.	0.005	25%	1099	$10,517,918
ASR	Asra Minerals Ltd	0.0025	25%	66666	$5,412,094
CUL	Cullen Resources	0.005	25%	100786	$2,773,607
LML	Lincoln Minerals	0.005	25%	385471	$8,410,279
OLI	Oliver'S Real Food	0.005	25%	469592	$2,162,928
RLL	Rapid Lithium Ltd	0.0025	25%	968621	$2,489,889
ROG	Red Sky Energy.	0.005	25%	4434158	$21,688,909
LDR	Lode Resources	0.16	23%	3365164	$21,031,939
FRS	Forrestaniaresources	0.075	21%	3540810	$18,599,992
OD6	Od6Metalsltd	0.03	20%	361746	$4,011,699
MSG	Mcs Services Limited	0.006	20%	86096	$990,498
HOR	Horseshoe Metals Ltd	0.021	17%	919448	$12,060,120
AUK	Aumake Limited	0.0035	17%	5000	$9,070,076
BLU	Blue Energy Limited	0.007	17%	623839	$11,105,842
CTQ	Careteq Limited	0.014	17%	640299	$2,845,425
E79	E79Goldmineslimited	0.027	17%	539768	$3,643,491

Making news…

Raiden Resources (ASX:RDN) has hit gold in all eight holes from its Phase 2 drilling at the Vuzel project in Bulgaria, confirming a shallow, potentially large gold system. Top results included 24.8m at 1.96g/t from surface, with a high-grade zone of 13.3m at 3.4g/t.

Another hole returned 56m at 1.09g/t, including 8.3m at nearly 5g/t. The flat, near-surface nature of the gold means cheaper, faster follow-up drilling, said Raiden. The explorer is now testing 1.5km of a 4km target zone, with more assays pending and rigs still turning.

Stock exchange operator NSX (ASX:NSX) is set to be fully acquired by Canada’s CNSX, owner of the Canadian Securities Exchange, in a $0.035-a-share deal. CNSX already owns a slice of NSX and now wants the lot, offering a 59% premium to Friday’s close. The NSX board is backing the deal, saying it’ll bring financial muscle, tech upgrades and a stronger shot at shaking up Aussie capital markets.

And, Xanadu Mines (ASX:XAM) has entered into a bid deal with Bastion Mining, which is offering 8 cents a share, a 56% premium to Xanadu’s last close.

ASX SMALL CAP LAGGARDS

Today’s worse performing small cap stocks:

Security	Name	Last	% Change	Volume	Market Cap
EEL	Enrg Elements Ltd	0.001	-50%	10161	$6,507,557
HMD	Heramed Limited	0.012	-37%	15269817	$16,636,452
AOA	Ausmon Resorces	0.001	-33%	140669	$1,966,820
VPR	Voltgroupltd	0.001	-33%	890010	$16,074,312
CDEDC	Codeifai Limited	0.007	-30%	179	$3,170,314
VAR	Variscan Mines Ltd	0.005	-29%	223042	$5,480,004
CTO	Citigold Corp Ltd	0.003	-25%	51069	$12,000,000
MMR	Mec Resources	0.003	-25%	11263310	$7,399,063
RLC	Reedy Lagoon Corp.	0.0015	-25%	147000	$1,553,413
ATX	Amplia Therapeutics	0.05	-23%	7928267	$25,216,923
AZL	Arizona Lithium Ltd	0.007	-22%	34414461	$41,056,331
HPR	High Peak Royalties	0.047	-22%	30500	$12,483,583
ERL	Empire Resources	0.004	-20%	382724	$7,419,566
HLX	Helix Resources	0.002	-20%	125000	$8,410,484
TEM	Tempest Minerals	0.004	-20%	2503404	$3,672,649
TYX	Tyranna Res Ltd	0.004	-20%	1409999	$16,442,127
HCT	Holista CollTech Ltd	0.045	-20%	1134435	$16,002,936
ZMM	Zimi Ltd	0.009	-18%	1033	$4,702,982
T92	Terrauraniumlimited	0.025	-17%	574360	$3,057,462
AQX	Alice Queen Ltd	0.005	-17%	4645921	$6,881,340
EM2	Eagle Mountain	0.005	-17%	142889	$6,810,224
EMU	EMU NL	0.02	-17%	234588	$5,069,963
JAV	Javelin Minerals Ltd	0.0025	-17%	1124158	$18,138,447
MEM	Memphasys Ltd	0.005	-17%	678910	$11,901,589
AMO	Ambertech Limited	0.14	-15%	326164	$15,741,789

IN CASE YOU MISSED IT

Impact Minerals (ASX:IPT) has raised the final $635,000 for a renounceable rights issue, under a shortfall offer. The funds will support a drilling program at the Arkun project, which will test the Caligula nickel-copper-platinum group element anomaly.

With $180,000 from the WA government’s Exploration Incentive Scheme partially funding the drilling program, IPT is keen to get drills turning at Arkun.

Alice Queen (ASX:AQX) has pocketed just under one million dollars in its latest raising effort to advance its Fijian gold exploration.

Anson Resources (ASX:ASN) locks in a first of its kind royalty rate for Green River lithium.

Many Peaks Minerals (ASX:MPK) has kickstarted a 3500 metre drilling campaign at its Odienné gold project in Côte d’lvoire.

Trading Halts

Arrow Minerals (ASX:AMD) – media reports in Guinea regarding mineral exploration tenements
EQ Resources (ASX:EQR) – cap raise
Estrella Resources (ASX:ESR) – agreement with mining services firm, PT Raka Energi Mandiri
Iltani Resources (ASX:ILT) – cap raise
Island Pharmaceuticals (ASX:ILA) – cap raise
Kingston Resources (ASX:KSN) – proposed transaction on Misima Gold Project
Koba Resources (ASX:KOB) – cap raise
Mayne Pharma (ASX:MYX) – proposed acquisition by Cosette
Nimy Resources (ASX:NIM) – cap raise
Oceana Lithium (ASX:OCN) – cap raise
OFX Group (ASX:OFX) – ASX query on its full year financial results
Peak Minerals (ASX:PUA) – exploration results from its Minta Rutile Project
Talga Resources (ASX:TLG) – cap raise
Volt Resources (ASX:VRC) – media reports in Guinea regarding mineral exploration tenements

At Stockhead, we tell it like it is. While Impact Minerals, Alice Queen, Anson Many Peak Minerals are Stockhead advertisers, they did not sponsor this article.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Closing Bell: Hot run ends for ASX as trade war impacts emerge