Home Finance ASX flat but Covid testing and cannabis companies among healthcare standouts

ASX flat but Covid testing and cannabis companies among healthcare standouts

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AFTER A BUMPY TRADING SESSION, the ASX finished barely changed, but a cannabis company expanding into psychedelics excited the market. The Australian sharemarket finished barely changed after a bumpy trading session, with iron ore miners and a meal kit provider among the losers, while healthcare stocks excited, including a cannabis company expanding into psychedelics.

The S&P/ASX200 closed just 1.8 points higher at 7530.3 while the All Ordinaries Index added 2.6 points to 7826.4. The big economic news was the outcome of the Reserve Bank of Australia’s monthly board meeting, which left the official cash rate at a historic low of 0.1 percent as expected, with the central bank saying the Delta variant had delayed the nation’s economic recovery.

No one was expecting a rate change, but all eyes were on its bond purchasing program. “The RBA opted to go ahead with its July decision to taper bond purchases from $5bn per week to $4bn from now,” ANZ Research said. “It did, however, decide to delay the following review of the level of purchases to February rather than November.

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“This was the compromise option that we flagged if the board couldn’t bring itself to delay the taper.” CommSec analyst James Tao said mining stocks weighed heavily after the iron ore price tumbled 9 percent, continuing recent volatility due to China’s emissions-related steel production curbs. ANZ Research said the latest data showed China’s iron ore imports rose strongly in August as lower prices attracted opportunistic buyers.

Rio Tinto dropped 1.8 percent to $108.70, BHP slipped 0.36 percent to $42.04, Fortescue shed 3.12 percent to $17.99, and Mineral Resources gave up 3.6 percent to $51.79. Mr. Tao said another weight on the local bourse was several stocks trading ex-dividend, including BlueScope Steel and Sonic Healthcare. BlueScope lost 2.5 percent to $23.22, and Sonic declined 2.82 percent to $42.32.

OMG chief executive Ivan Tchourilov said the spread of the Delta variant had bolstered Sonic’s revenues as a Covid-19 testing provider and the push to be at the forefront of vaccination passports made the company an exciting stock to watch. “Healthcare providers will be fighting for the top spot … when Covid-ridden states like NSW and Victoria attempt to lift the current heavy lockdowns,” he said.

Antioch rocketed 25 percent to 22.5 cents after signing a Turkish distribution deal for its e EuGeni reader platform and Covid-19 rapid test, saying it would place the readers “into clinics and laboratories across the country”. Medicinal cannabis company Little Green Pharma announced it had been granted a Schedule 9 license by the West Australian Department of Health to supply psilocybin – the active ingredient in magic mushrooms – to eligible license holders.

“Currently classified as a Schedule 9 drug, psilocybin induces a psychedelic state through its action on the brain’s 5HT-2A serotonin receptors and, when combined with psychotherapy, is the subject of extensive global research for the treatment of mental illness,” the company said.

“The treatment program is known as ‘psychedelic-assisted psychotherapy and is being applied to various mental health conditions including depression, PTSD and anxiety.” Shares in Little Green Pharma jumped 6.54 percent to 81.5 cents. Another strong healthcare stock was synthetic antibiotics company Recce Pharmaceuticals, leaping 24.7 percent to $1.03.

Mr. Tchourilov said Flight Centre took to the skies after a favorable rating from Credit Suisse, bullish on the stock in the past. “Investors seem to have agreed with the sentiment, and the price gained more than six percent (to $18.59),” he said.

“The expansion of their corporate travel business into Japan – a huge corporate travel market – added another notch in the belt as the embattled company attempts a Covid recovery. “The vote of confidence saw milder gains by fellow travelers Webjet, up 1.67 percent to $6.10, and Qantas, up 0.74 percent to $5.43.”

A poor performer was Marley Spoon, which slumped 10.35 percent to $1.82 after supermarket giant Woolworths ditched its 9.87 percent interest in the meal kit delivery business but said it remained committed to an ongoing, five-year growth alliance announced in June 2019 covering marketing support, customer origination programs, and co-operation on logistics and supply chain operations.

Woolworths slid 0.47 percent to $40.54. Cloud-based call recording company Dubber was flat at $3.99, but Mr. Tchourilov said it was his company’s most purchased stock of the day. “A recent inductee to the coveted ASX 300, Dubber has returned 353 percent in value to shareholders in the last year and more than 900 percent since listing in 2016,” he said.

ANZ eased 0.11 percent to $28.08, Commonwealth Bank inched two cents lower to $102.14, and National Australia Bank backtracked 0.66 percent to $28.67, but Westpac lifted 0.15 percent to $26.03. The Aussie dollar bought 74.18 US cents, 53.64 British pence, and 62.48 Euro cents in afternoon trade. Originally published as.

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