Weekly ASX Small Cap Wrap: Even the Budget was unable to cushion the fall in ASX tech stocks

ASX 200 has finished the week around 1 per cent lower, with investors steering away from tech and growth stocks.

Seven out of the 11 sectors dropped, with Technology being the biggest drag, falling by more than 6 per cent.

Investors have mainly shunned tech and growth stocks in favour of cyclicals this week, after US CPI rose by 0.8% in April, its highest since 2009 and topping estimates.

But the health care sector was boosted by this week’s Federal Budget, with the government investing a record $503 billion over the next four years into the health of Australians.

That figure includes measures to mitigate the pandemic such as vaccine rollouts, as well as a$17.7 billion spend on aged care.

The biotech sector also scored a win, after the Budget announcement of a “patent box” – a concessional tax incentive scheme of 17 per cent aimed at the biotech sector that encourages the development of patented products here in Australia.

Meanwhile, the Commonwealth Bank (ASX:CBA) has hit its all time high on intraday today, trading as high as $97.38. The bank’s shares have risen by 3 per cent this week, in a clear indication that investors are rotating towards cyclical stocks.
 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for May 10-14 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

Mindax (ASX:MDX) +3.200%

Junior explorer Mindax has experienced a fairytale comeback today, after its shares were suspended in 2019 due to exchange violations. After trading recommenced, it surged by more than 3,000% right off the bat, at one point even surpassing 6,000%.

The explorer has recently tapped investors for $2.08m through an entitlement offer while its shares were suspended. The cash will be used to fund its Mount Forrest Iron Project and Meekathara Gold Project.

Carpentaria Resources (ASX:CAP) +156%

The mineral explorer has gained since announcing on Wednesday that it has resolved a legal dispute with partner Pure Metals (PM). The disagreement was around PM’s obligations on a sale and purchase deal struck in November 2020.

The matter was resolved, and will lead to the completion of a new deal under which Carpentaria will acquire PM’s 24.149% of the Hawsons Iron Project. In return, Carpentaria will issue to PM 90.8 million Carpentaria shares.

Alligator Energy (ASX:AGE) +74%

The uranium and cobalt-nickel explorer’s share price almost doubled this week, after the company took steps to become a fully-fledged uranium producer.

This week, Alligator announced a strategic agreement with global commodities trader, Traxys.

Under the deal, Traxys will provide a full scope of work for Alligator’s uranium project, which includes marketing services on future uranium production, long term off-take contracting, and project development financing of up to $15m.

 

ASX SMALL CAP LOSERS

Here are the worst performing ASX small cap stocks for May 10-14 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

BNPL stocks were battered this week, mainly on inflation concerns and what it meant for the valuation of growth stocks like BNPL if interest rates rise.

LayBuy (ASX:LBY) dropped 20 per cent, while Splitit (ASX:SPT) fell by 16 per cent for the week.

Investors are concerned that higher rates arising from higher inflation might prompt a revaluation of high-growth and profit-less stocks downwards.

The post Weekly ASX Small Cap Wrap: Even the Budget was unable to cushion the fall in ASX tech stocks appeared first on Stockhead.

Barry Stroman was a reporter for Zerg Watch, before becoming the lead editor. Barry has previously worked for Wired, MacWorld, PCWorld, and VentureBeat covering countless stories concerning all things related to tech and science. Barry studied at NYU.

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