Early Trading Sees Mixed Sector Performance
The ASX started trading at 10 am AEST and registered a slight fall at 10:15 am, with the index falling 0.28% in the initial hour. Seven of the eleven sectors were higher, even though they had dropped. There was also profit-taking in the financial and utilities sectors after two record closing highs earlier in the week.
The ASX 200 utility index has gained 6.2 percent year-to-date, and financials are up 8 percent over the same span. After recent good performances, investors seemed to be cashing in on gains, especially in these sectors.
Commodity Prices Move Lower Overnight
Oil prices extended their decline, with Brent crude falling to US$66.15 a barrel. Gold also eased, with futures down 0.2% to US$3,399 an ounce. Spot gold traded at US$3,344 an ounce in the morning session.
The weaker commodity prices come as traders reassess global demand conditions. Market attention has also shifted towards the performance of critical minerals, which are gaining traction among small-cap miners in early trade.
Critical Minerals Drive Small-Cap Gains
OD6 Metals (ASX: OD6) announced the successful production of mixed rare earth carbonate and hydroxide products from its Splinter Rock project. The company reported grades of 56% and 59% total rare earth oxides, respectively, achieved through a heap leach flow sheet process.
Altitude Minerals (ASX: ATT) confirmed a mineralised zone containing zircon and titanium at its Nilpinna Eromanga Basin project. Surface sampling returned grades of up to 30% zircon and 40% ilmenite, with drilling scheduled for September.
Advancements in AI and Gallium Exploration
I Synergy (ASX: IS3) signed an MoU with Treasure Global Inc. to acquire AI-based GPUs valued at $300,000. Payments will be made over six months to support high-performance computing projects.
Kingsland Minerals (ASX: KNG) reported promising gallium grades at its Leliyn graphite project, with CSIRO testing confirming commercial potential. Gallium is trading at US$1,089 per kilogram, and the company is preparing a maiden resource estimate alongside a graphite scoping study.
Intraday Price Pressure Persists
Source: Market Index
By 11.31 am AEST, the index was trading at $63.91, down 2.04% from the previous close of $65.24. The session low stood at $63.81, placing the price near intraday support.
The market opened at $64.90 but remained below the Volume Weighted Average Price (VWAP) of $64.40 for most of the morning. Turnover reached $12.45 million within the first 90 minutes, with volumes below the four-week average.
Technical Levels in Focus
Initial resistance was at the early high, which was at $65.10. Secondary resistance was located at the middle Bollinger Band, which was approximately $64.50. Support is fixed at the $64.00 level, which had been tested momentarily, and the intraday low of 63.95 remains a significant reference point.
The price action held around the bottom Bollinger Band for most of the trading, indicating continuous selling pressure. A reversal would need a reversion to a position above VWAP and the middle band.
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Market Outlook
Sentiment is sidelined in the short term as traders consider sectoral gains versus profit-taking in well-performing securities. Should the $63.80 stick, the market may make an effort to recover to the range of $64.50-$64.70. A prolonged downside break could provide the approach to $63.20.
Medium-term performance has indicated that the index is -9.86 in the last month, with poor performance compared to the ASX 200 and the financial services industry. It could take a blatant catalyst, like earnings revisions being positive or commodity prices being firm, to spark sentiment back to the positive side.
