Closing Bell: Healthcare sector gives ASX a booster to rise 0.33pc

The ASX 200 added 0.33pc today, rising on strength in healthcare stocks. UBS is predicting high EPS-based growth for the sector this year.

The healthcare sector has given the ASX a shot in the arm today, leading gains. Pic: Getty Images

• ASX lifts 0.33pc on healthcare sector strength

• CSL adds 2.4pc as UBS marks ASX healthcare sector as best EPS pick

• Chinese manufacturing data contracts, but shows signs of stirring

Are healthcare bulls returning?

The ASX healthcare sector was the best performing of the ASX’s 11 subcategories in trade today, handily outperforming the other sectors with a 1.58% jump.

With support from industrials (+1%) and consumer discretionary (+0.98%), that was enough for the ASX 200 to make a convincing gain of 0.33% today, having had a steady run of momentum throughout trade.

Source: Market Index

Regis Healthcare (ASX:REG) added 3.2%, Ramsay Health Care (ASX:RHC) 1.9% and Summerset Group (ASX:SNZ) 1.3%.

As for our healthcare giants, CSL (ASX:CSL) gained 2.4%, Pro Medicus (ASX:PME)2% and Cochlear (ASX:COH) 1.7%.

If financial giant UBS is to be believed, this may be the start of a bit of a bullish run for ASX biotech stocks, which have been suffering over the past few months.

UBS reckons the ASX healthcare sector is now undervalued, offering the best earnings-per-share growth of all sectors, and forecasting a 20% increase in the 2025-26 year.

“Investor sentiment towards the healthcare sector has broadly cooled over the past year, with some marked deterioration seen across many stocks,” UBS says.

“Cochlear in particular has seen investor apathy build over the last year, which represents a significant change of views.”

Back on the ASX today, the main drag was in the materials sector, down 0.77%.

The ASX 200 Resources index was also an anchor, shedding 0.96%, but it was outweighed by gains in the All Tech, Gold and Small Ords indices.

Source: Market Index

Chinese manufacturing data contracts again

While iron ore has been enjoying a small uptick in pricing the past five days or so, the latest data out of China isn’t the best news for Aussie base metal stocks.

Manufacturing activity from our largest trading partner fell again for a third month straight in June, despite Beijing’s attempts to stimulate the sector.

The official purchasing manager’s index did improve slightly from 49.5 in May to 49.7 in June, but remained below the 50-point benchmark which indicates whether the index is expanding or contracting.

Inventory and employment levels at factories fell as well, but the news wasn’t all bad.

The sub-index tracking manufacturing production rose to 51 and new orders lifted to 50.2, which could indicate the first stirrings of momentum beginning to build in China’s industrial activity.

Chinese Premier Li Qiang said Chinese authorities would implement measures to “make China a mega-sized consumption powerhouse” as well as a manufacturing one in a speech at the World Economic Forum’s annual conference in China.

“We still think that there are challenges this year, but I think it’s not as far-fetched as we thought before,” Oxford Economics lead economist for China Louise Loo said.

“However punitive tariffs are, I think in the near term, it’s quite hard to decouple China from global supply chains, and that means we will continue to see China exports, at least, remain quite competitive, and that should support economic growth for the Chinese.”

It remains to be seen if that will translate into higher demand for Australian iron ore, but one can hope.

ASX SMALL CAP LEADERS

Today’s best performing small cap stocks:

Security	Name	Last	% Change	Volume	Market Cap
WEL	Winchester Energy	0.002	100%	165600	$1,363,019
LSR	Lodestar Minerals	0.011	83%	42455380	$1,910,543
ADD	Adavale Resource Ltd	0.0015	50%	15489651	$2,287,279
ADY	Admiralty Resources.	0.006	50%	1690337	$10,517,918
EEL	Enrg Elements Ltd	0.0015	50%	860601	$3,253,779
MPR	Mpower Group Limited	0.01	43%	5225088	$2,405,923
GTE	Great Western Exp.	0.011	38%	3625782	$4,542,063
MEG	Megado Minerals Ltd	0.023	35%	4786016	$10,313,615
ALM	Alma Metals Ltd	0.004	33%	2325000	$5,261,182
FCT	Firstwave Cloud Tech	0.016	33%	3070713	$20,562,224
FHS	Freehill Mining Ltd.	0.004	33%	15028446	$10,241,561
GTR	Gti Energy Ltd	0.004	33%	5538733	$8,996,849
SPX	Spenda Limited	0.008	33%	16838995	$27,691,293
GLH	Global Health Ltd	0.068	33%	176778	$2,987,301
AAU	Antilles Gold Ltd	0.005	25%	6046776	$9,516,272
ERL	Empire Resources	0.005	25%	692641	$5,935,653
RCM	Rapid Critical	0.0025	25%	1125000	$2,831,556
ROG	Red Sky Energy.	0.005	25%	120000	$21,688,909
TMX	Terrain Minerals	0.0025	25%	5339766	$5,063,629
VR1	Vection Technologies	0.036	24%	40421798	$51,255,235
THR	Thor Energy PLC	0.011	22%	2677843	$6,397,109
KNB	Koonenberrygold	0.039	22%	46537381	$32,790,159
RPG	Raptis Group Limited	0.063	21%	185561	$18,235,612
NGX	Ngxlimited	0.145	21%	45773	$10,873,421
SDV	Scidev Ltd	0.36	20%	293999	$57,026,459

Making news…

Lodestar Minerals (ASX:LSR) is looking to follow up on gold hits at its Chilean copper-gold projects with proceeds from a $2.2m two-tranche share placement.

LSR is offering $475k in the first tranche to clients of lead manager Oakley Capital Partners, with the rest hanging on shareholder approval.

Adavale Resources (ASX:ADD) is preparing to put drill bit to ground at the London Victoria Mine in NSW, which historically produced gold grades up to 43.8 g/t gold.

It’s the first exploration at the mine in 30 years; ADD will target shallow extensions to the existing mineral resource estimate, which currently sits at 115,000 ounces of gold.

FirstWave Cloud Technology (ASX:FCT) has inked a licensing agreement with Claro Dominican Republic to license its NMIS v9 network management software suite for an upfront fee of US$250k.

It’s a pure-profit contract, as the contract doesn’t require delivery, support or professional services.

GTI Energy (ASX:GTR) is locking in a $4.5m placement at an issue price of 0.035 cents a share, a 16.7% premium to the last close price of 0.030 cents. The money will be funnelled directly to resource expansion and infill drilling at the Lo Herma uranium project.

GTR’s recent scoping study revealed a potential pre-tax net present value of between $174m and $187m and an internal rate of return of between 52% and 66% for Lo Herma. Check out Stockhead’s Break it Down for more on GTR’s capital raising.

Spenda (ASX:SPX) has teamed up with APG Pay Pty Ltd to develop and commercialise a corporate credit platform.

The two companies will collab on a scaleable B2B payments space that can scale across multiple industries, starting with the travel industry. Spenda reckons the deal will bring in recurring profit of $1.7m per year.

ASX SMALL CAP LAGGARDS

Today’s worst performing small cap stocks:

Security	Name	Last	% Change	Volume	Market Cap
CT1	Constellation Tech	0.001	-50%	1322698	$2,949,467
IS3	I Synergy Group Ltd	0.002	-50%	3892995	$2,002,920
T3D	333D Limited	0.006	-33%	33333	$1,585,651
ADR	Adherium Ltd	0.004	-33%	3436600	$5,390,874
TEG	Triangle Energy Ltd	0.002	-33%	4164703	$6,267,702
TKL	Traka Resources	0.001	-33%	135263	$3,188,685
L1M	Lightning Minerals	0.043	-28%	1471249	$6,199,699
ZMM	Zimi Ltd	0.008	-27%	616731	$4,702,982
FIN	FIN Resources Ltd	0.003	-25%	557800	$2,779,554
GMN	Gold Mountain Ltd	0.0015	-25%	1983598	$11,239,518
HLX	Helix Resources	0.0015	-25%	1234287	$6,728,387
SFG	Seafarms Group Ltd	0.0015	-25%	893383	$9,673,198
SRN	Surefire Rescs NL	0.0015	-25%	334051	$4,972,891
TYX	Tyranna Res Ltd	0.003	-25%	325000	$13,153,701
GLA	Gladiator Resources	0.007	-22%	1626499	$6,824,671
YAR	Yari Minerals Ltd	0.012	-20%	2978290	$8,320,672
AUK	Aumake Limited	0.002	-20%	1177734	$7,558,397
MEM	Memphasys Ltd	0.004	-20%	6329063	$9,917,991
MKL	Mighty Kingdom Ltd	0.016	-20%	1737419	$10,326,928
PPG	Pro-Pac Packaging	0.016	-20%	78233	$3,633,754
RAN	Range International	0.002	-20%	2187661	$2,348,226
SKK	Stakk Limited	0.004	-20%	2620995	$10,375,398
VEN	Vintage Energy	0.004	-20%	1780465	$10,434,568
HIQ	Hitiq Limited	0.014	-18%	1054211	$7,814,865
BDM	Burgundy D Mines Ltd	0.029	-17%	604995	$49,746,630

IN CASE YOU MISSED IT

QPM Energy (ASX:QPM) is powering up with plans for a new gas-fired plant at the Isaac Energy Hub.

Astute Metals (ASX:ASE) has identified four high-priority gold-silver targets at its Needles project in Nevada, USA, thanks to a data review.

Green Critical Minerals (ASX:GCM) has cleared another hurdle at the McIntosh graphite project with a PFS showcasing robust economics including $25m post-tax NPV, 25.3% IRR and a 32.5-year mine life.

LTR Pharma (ASX:LTP) has completed extractables studies for its Spontan intranasal spray for erectile dysfunction and kicked off a leachables study.

Ausgold (ASX:AUC) has released a positive definitive feasibility study for its Katanning gold project (KGP) in WA, highlighting robust returns over a 10-year mine life.

Theta Gold Mines’ (ASX:TGM) board has rubber stamped the TGME mine in South Africa’s Mpumalanga region as high gold prices stir investment in the historic mining district.

Break it Down: Anson Resources (ASX:ASN) has paired up with a Korean battery maker to develop a DLE demonstration plant at the Green River project in Utah.

Redcastle Resources (ASX:RC1) is on its way to becoming an integrated exploration and production company after lifting resources to 42,000oz at the Redcastle project.

TRADING HALTS

Australian Mines (ASX:AUZ) – cap raise and potential acquisition
AuKing Mining (ASX:AKN) – cap raise
Battery Age Minerals (ASX:BM8) – cap raise
Blackstone Minerals (ASX:BSX) – cap raise
archTIS (ASX:AR9) – cap raise
Lodestar Minerals (ASX:LSR) – cap raise
Liontown Resources (ASX:LTR) – executive changes
Olympio Metals (ASX:OLY) – cap raise
Peak Minerals (ASX:PUA) – response to ASX price query
Red Mountain Mining (ASX:RMX) – cap raise
Rent.com.au (ASX:RNT) – cap raise
Terra Uranium (ASX:T92) – acquisition and cap raise
Vitasora Health (ASX:VHL) – cap raise

At Stockhead, we tell it like it is. While GTI Energy is a Stockhead advertiser, it 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: Healthcare sector gives ASX a booster to rise 0.33pc