ASX 200 down as iron ore miners, tech stocks fall; Mesoblast soars 45pc; Crown keeps Vic casino licence; Premier up on demerger plans

Iron ore futures fall. Mesoblast up 45 per cent as seeks US FDA nod. Investors welcome Premier's profit beat, demergers plan. 29Metals tumbles as suspends copper mine. Crown 'suitable' for licence. 

Investors are parsing corporate updates and awaiting inflation and retail sales data in a short Easter week. Picture: Gaye Gerard

Welcome to the Trading Day blog for Tuesday, March 26. The ASX 200 index closed 0.4 per cent lower at 7780.20 points, as big iron ore miners joined tech falls, offsetting energy gains.

The Aussie dollar is trading around US65.40c.

Updates

5:34 pm March 26, 2024 Highlight

Tyre recycler Entyr in administration

Megan Neil

Queensland tyre recycling company Entyr has gone into voluntary administration.

"The directors believe the appointment is the best mechanism to accelerate a recapitalisation or sale of the business," the ASX-listed Entyre says.

Deloitte turnaround and restructuring partners Richard Hughes and Travis Anderson have been appointed as administrators.

"The business will continue to trade while the administrators undertake an urgent assessment of its financial position and the future of the business and its assets." Mr Anderson said.

Based in Stapylton in South East Queensland, Entyr is a clean conversion company that holds worldwide patents to convert end-of-life tyres into products and clean energy.

5:08 pm March 26, 2024

Rain delays drilling for King River

Megan Neil

King River Resources says continued heavy rainfall in the Northern Territory is still delaying drilling at its Tennant Creek project.

The gold explorer says the rain is delaying the mobilisation of heavy equipment.

"The recent weather, characterised by the passage of Cyclone Megan and rainfall exceeding 170mm, along with an additional 50mm over the last two days, significantly exceeds the typical March rainfall average of 50mm in Tennant Creek." The company says the forecast indicates continued showers until the weekend.

"Given the extensive soaking and flooding in the area, it is challenging to accurately predict when drilling operations can commence. The exploration team expect to remobilise around mid-April once the ground has dried enough to support the weight of the equipment to undertake its planned exploration programme at Tennant Creek."

4:41 pm March 26, 2024

Iron ore miners drag down ASX 200

Megan Neil

Falls by heavyweight iron ore miners and the tech sector dragged the ASX 200 index down 0.4 per cent to 7780.20 points.

The big iron ore miners turned lower as iron ore futures fell 2.5 per cent in Singapore, amid ongoing concerns over Chinese demand. BHP dropped 0.6 per cent to $43.62, Fortescue fell 1.2 per cent to $25.20 and Rio Tinto declined 0.2 per cent to $121.41.

The ASX declines followed a weak lead from Wall Street, where tech stocks led the declines and the S&P 500 fell 0.3 per cent. Tech stocks were also leading declines on the ASX, with WiseTech losing 2.3 per cent to $94.29 and Xero down 2.7 per cent to $133.39.

The heavyweight banking sector was weaker as CBA dipped 0.2 per cent to $118.60, NAB fell 0.3 per cent to $34.46, Westpac dropped 0.8 per cent to $26.24 and ANZ eased 0.3 per cent to $29.06. But Macquarie lifted 0.5 per cent to $198.49.

Mesoblast surged as much as 58 per cent before closing more than 45 per cent higher at 48c, as the biotech gears up for a third attempt to gain US FDA approval for its lead product candidate.

Copper producer 29Metals tumbled as much as 36 per cent before ending down 26 per cent at 40c after suspending operations at its Queensland mine due to further heavy rainfall events.

Energy stocks tracked higher oil prices overnight with Woodside rising 1 per cent to $30.37, Santos gaining 0.4 per cent to $7.61 and Viva Energy hitting a record high, up 1.6 per cent to $3.72.

Shares in billionaire retailer Solomon Lew's Premier Investments lifted 4.4 per cent to $32.00 on the back of its demerger plans and better-than-expected earnings result.

The Stokes-controlled Seven Group fell 4.1 per cent to $39.62 after it warned Boral, which rejected its takeover offer, about 'misleading' investors. Boral dropped 2 per cent to $6.03.

3:48 pm March 26, 2024

ASX 200 may hit high this week: IG

Megan Neil

The ASX 200 could still hit a record high this week as end-of-month and quarter rebalancing flows through the market, according to IG market analyst Tony Sycamore.

After coming within sight of its 7853-point record high on Monday, the benchmark index is back below 7800 points following losses on Wall Street overnight.

"However, with end-of-the-month and end-of-the-quarter rebalancing flows likely to hit the market ahead of the Easter long weekend, the ASX200 could still see a fresh all-time high this week," Mr Sycamore says.

"Furthermore, if the ASX200 doesn't end this month below 7699, the local bourse will lock in a fifth consecutive month of gains – still with some work to do if it's to challenge the 11 straight months of gains the ASX200 recorded during its rebound from the Covid Crash low."

The ASX 200 set a record intraday high of 7853.10 points on March 8, as well as an all-time closing high of 7847.00 points.

3:14 pm March 26, 2024 Highlight

29Metals drops as suspends mine

Megan Neil

Shares in 29Metals fall sharply after the copper producer suspends operations at its Capricorn Copper mine in Queensland due to further heavy rainfall.

The company says there will be a "significant reduction" in headcount and activity at the site as mining and milling activity winds down over the next six weeks.

The company says the decision to suspend operations follows an extended period of rainfall between late January and mid-March following consecutive tropical cyclones. That resulted in a steady accumulation of water in regulated structures on site to levels now similar to those following an extreme weather event in March 2023.

29Metals chief executive Peter Albert says the decision to suspend operations has not been taken lightly.

“Unfortunately, the combination of elevated water levels at the beginning of the wet season (as a result of the event a year ago) and the sustained rainfall since late January this year has more than offset our successes reducing water levels through mechanical evaporation and authorised releases of treated water within prescribed limits," Mr Albert said.

“The duration of the suspension will be dependent on a number of factors, including reducing the water levels held on site and securing the regulatory approvals required to set Capricorn Copper on a sustainable footing. 29Metals’ objective will be to ensure the period of suspension is as short as possible."

29Metals shares have tumbled as much as 36 per cent to a low of 34.5c, and are now down 26 per cent to 40c.

2:31 pm March 26, 2024 Highlight

Slight rise in inflation rate tipped

Megan Neil

The annual rate of inflation is expected to have risen slightly in February, with Wednesday's monthly consumer price index indicator to reveal more about the state of services inflation.

According to Bloomberg consensus forecasts, headline CPI is tipped to rise to 3.5 per cent year-on-year in February from 3.4 per cent in January.

ANZ economists forecast a 3.5 per cent rise and NAB economists expect a 3.6 per cent print.

Westpac and CBA economists expect the pace of annual inflation to rise to 3.8 per cent.

"With February being the mid month of the quarter we get an update on many services including the annual update on education prices," a Westpac research report noted.

"There is uncertainty around electricity where we expect a bounce as government energy rebates come to an end."

CBA economists expect a bounce back in monthly CPI as seasonal goods discounting comes to an end and as fuel prices lifted, also tipping price growth in rents and dwelling construction with some offset from holiday travel.

2:14 pm March 26, 2024

ANZ sets high bar on carbon deals

David Ross

ANZ head of institutional lending Mark Whelan says the bank has not done any upstream lending into oil and gas for a number of years, but warned the bank was not looking to cut all ties with companies in fossil fuels.

Speaking at a business summit in Sydney, Mr Whelan said ANZ was engaging with its institutional clients over their carbon profiles.

He said ANZ would continue relationships with businesses that showed they were making progress in cleaning up their emissions footprint, but warned “if we don’t like what we’re hearing we would step back”.

“You’re better off having that conversation with the bigger companies that have more capacity to invest in renewables,” he said.

“We’ve set the bar really high around new deals.”

1:47 pm March 26, 2024 Highlight

Mesoblast rockets on US FDA update

Valerina Changarathil

ASX-listed biotech Mesoblast's shares are up nearly 35 per cent to 44.5c as the group gears up for a third attempt to gain US FDA approval for its lead product candidate.

The approval for its Ryoncil (remestemcel-L) product for the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD) – a devastating and life-threatening complication of a bone marrow transplant – has been a key priority for chief executive Silviu Itescu.

On Tuesday, Mesoblast lifted its trading halt to tell investors a resubmission for its Biologics License Application will be filed in the next quarter, "seeking to address all remaining product characterization issues". It follows a key meeting with the US FDA, which has now considered available clinical data from a Phase 3 study that "appears sufficient" to support the application for treating pediatric patients. "The responses and guidance from FDA are clear and provide us with a high level of confidence to refile our BLA," Dr Itescu says.

Mesoblast raised $97m from investors in December to meet the regulator's request for more data – including a trial completed among adults. That request was part of the US FDA's second snub in August last year, which sent shares to an 18-year low.

1:42 pm March 26, 2024

RBA to look at surcharges on debit payments

David Ross

The Reserve Bank of Australia’s head of payments policy Ellis Connolly has backed a review of the country’s card payments system, noting it was time to question if debit payments should be free.

Speaking at a business summit in Sydney, Mr Connolly said the rise of card payments had changed the RBA’s thinking around surcharges.

This comes after the RBA allowed businesses to pass through card surcharges in the early 2010s, when cash use remained high.

He said this move to allow surcharges was aimed at keeping card costs low and encouraging cash use, but noted many consumers now felt they could not avoid surcharges as cash use had plummeted.

“We’re going to try to reduce those frustrations for customers at the same time as retaining those benefits of surcharging,” he said.

Mr Ellis said the RBA was very concerned about ongoing negotiations with Armaguard over cash distributions.

He said the RBA would "place a high priority on this finding a long term solution" amid a declining cash environment.

1:06 pm March 26, 2024

LNG Japan-Woodside Scarborough deal done

Valerina Changarathil

LNG Japan is now a 10 per cent stakeholder in Woodside's Scarborough project following completion of a complex deal, first announced in August last year, that has handed the seller $US910m in proceeds.

The 10 per cent non-operating interest is held by LJ Scarborough Pty Ltd (LNG Japan), the jointly owned subsidiary of LNG Japan Corporation – a 50:50 joint venture between Sumitomo Corporation and Sojitz Corporation – and the Japan Organization for Metals and Energy Security (JOGMEC).

The three elements of the deal were equity in the Scarborough, potential LNG offtake and collaboration on potential opportunities in new energy. The US$910m includes the purchase price, reimbursed expenditure and escalation (provision for cost rises).

Woodside is the operator and holds a 90 per cent interest in the Scarborough JV with the gas being processed at the Pluto LNG facility, where Woodside is currently constructing Pluto Train 2. Woodside is also operator of the Pluto Train 2 Joint Venture and holds a 51 per cent participating interest.