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ASX Trading Wrap: Resources stocks hit records, growth favourites sink

Rene Anthony

Thursday, July 29, 2021

Thursday, July 29, 2021

The ASX touched an all-time intraday high earlier in the week, but gains were wiped out as markets digested earnings results both locally and from abroad

The ASX touched an all-time intraday high earlier in the week, but gains were wiped out as markets digested earnings results both locally and from abroad

The ASX 200 traded sideways throughout the week, ending largely in line with where it finished last Friday, at 7,392.60 points. Resources stocks were the big driver of gains this week, but at the other end of the scale, a host of growth names underperformed.

Which shares excelled?

After acquiring the Mt Gibson Gold Project from Crimson Metals for just shy of $40 million, Capricorn Metals (ASX: CMM) was one of this week best-performing stocks, up around 19%. With the development integral to Capricorn plans to become a multi-mine gold company, buying support flocked in. The company will soon commence infill and extensional drilling, as well as other field work.Hitting eight-year highs was Lynas Rare Earths (ASX: LYC), with the resources company delivering a record quarter on the back of strong demand for rare earths materials. With its average selling price increasing from $20.20 to $39.10 per kilogram, the company recorded $185.9 million in revenue across the June quarter versus just $38 million in the prior corresponding period. The increasing prominence of electric vehicles, as well as smartphones, has supercharged demand for Lynas' neodymium and praseodymium (NdPr) products.Following its quarterly report last week, shares in Paladin Energy (ASX: PDN) have continued to cement their gains, up nearly 15%. The same could also be said for copper producer and explorer Copper Mountain Mining (ASX: C6C), which delivered its Q2 financial results on Monday, followed by half-yearly accounts the next morning. The company reported production of 29.6 million pounds of copper equivalent, $142.1 million in revenue, net income of $38.7 million, and cash flow from operations of $94.6 million. With each of the iron ore majors touching all-time highs this week following strong reports, buoyant iron ore prices, or in the case of Rio Tinto (ASX: RIO), a massive dividend, Champion Iron (ASX: CIA) was also in on the action, notching up its own high. That came after its quarterly report showed record net income, earnings per share and EBITDA for the first quarter of its financial year. A positive update from OZ Minerals (ASX: OZL) gave its shareholders reason to be happy, with the stock responding warmly to news the miner has raised its full-year gold production targets. Meanwhile, copper production in June quarter touched 32,681 tonnes, up from 26,842 tonnes in the March quarter, and gold production rose from 55,150 ounces to 57,875 ounces..Elsewhere, lithium stocks were still marching higher, led by the likes of Orocobre (ASX: ORE), Galaxy Resources (ASX: GXY) and Vulcan Energy Resources (ASX: VUL), before the latter entered a trading halt this morning in anticipation of news regarding a binding offtake term sheet.Other names to fly this week were Liontown Resources (ASX: LTR), Orora (ASX: ORA), Iress (ASX: IRE), Zimplats (ASX: ZIM), Bluescope Steel (ASX: BSL) and Virgin Money UK (ASX: VUK).

Which shares dragged on the market?

A host of market darlings headlined the worst-performing ASX shares this week, as well other household names.

Crown Resorts (ASX: CWN) continues to slide on regulatory issues, beginning with the Western Australian Government extending the timeline for the WA Royal Commission looking into its practices. The company was then hit by a $61 million tax bill it will pay the Victorian Commission for Gambling and Liquor Regulation. Shares in the casino operator shed nearly 15% across the week, pushing the stock to its lowest level since November last year.Former favourites among growth investors in Redbubble (ASX: RBL), A2 Milk (ASX: A2M) and Appen (ASX: APX) were also sold down sharply this week, despite the absence of price-sensitive news for any of these companies. As we enter reporting season it could be a case of investors reducing their exposure to some of the stocks that disappointed during the last earnings window.AGL Energy (ASX: AGL) and Origin Energy (ASX: ORG) both slipped further as sentiment towards the energy wholesalers remains on the back foot. That was not helped by today non-cash impairment raised by Origin, and the company sombre outlook for energy markets in the current financial year. Origin is flagging a major fall in underlying EBITDA for its energy markets division to $450-600 million, before a potential rebound thereafter.Clinical stage immuno-oncology company Imugene (ASX: IMU) was in the news this week, and the unveiling of a capital raise dampened the share price. The company is completing a $95 million capital raise to support its clinical portfolio over the next four years, with the overwhelming majority already secured from institutions. With the capital being raised at $0.30 per share, the company stock price drifted lower towards the issue price.The slide in Kogan (ASX: KGN) shares since its last trading update gathered pace, with the ecommerce retailer shedding more than 8%. After a boom period last year, the company growth has begun to slow in recent months, while inventory and stock issues have also weighed on sentiment.A number of other high-profile names ended the week on the back foot, with Afterpay (ASX: APT), EML Payments (ASX: EML), Pointsbet (ASX: PBH) and Nuix (ASX: NXL) all slumping.

We'll be back next week with another Weekly ASX Trading Wrap Up - until then, have a great week!

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