What's Affecting Markets Today
Neuren Faces Short Seller Challenge
Neuren Pharmaceuticals experienced a significant drop in its share price, plunging 13% after Culper Research, a US-based short seller, released a report criticizing the company and its licensing partner, Acadia. The report accused Acadia of misrepresenting the safety profile of Daybue, a drug aimed at treating Rett syndrome, and claimed that analysts’ sales forecasts for Daybue were overly optimistic, with sales purportedly peaking in August 2023. Neuren, which has seen its shares soar by 1516% over the past five years due to Daybue’s commercial success and its agreement with Acadia, has yet to respond to these allegations.
RBNZ’s Stance on Inflation and Rate Policy
Adrian Orr, the Governor of the Reserve Bank of New Zealand (RBNZ), outlined the bank’s commitment to maintaining a 2% inflation target in a recent speech, emphasizing the balance this target strikes between the costs and benefits of inflation. Despite a significant drop in headline inflation from 7.3% in 2022 to 4.7% by the end of 2023, Orr highlighted the challenge of addressing persistent non-tradable inflation, which has only slightly decreased from its peak. The RBNZ’s focus remains on managing these enduring inflation pressures to achieve its inflation goal, indicating no immediate shift towards rate cuts. Orr’s comments reflect a careful approach to inflation targeting, aiming for sustainable growth and job stability in the medium to long term.
ASX Stocks
ASX 200 - 7,654.5 (0.6%)
Key Highlights:
Today’s ASX performance was characterized by a notable recovery in the mining sector, particularly among lithium miners, which propelled the S&P/ASX 200 to a 0.5% increase by midday. This uptick was fueled by rising commodity prices and a weakening US dollar, against a backdrop of global economic softening that has led to speculation about potential rate cuts by central banks. On Wall Street, the S&P 500 Index reached a new high, reflecting investor optimism amidst mixed economic signals, including weaker than expected US retail sales and varied data on manufacturing and consumer confidence. In the ASX, materials and energy sectors each grew by 1.1%, supported by increases in oil and iron ore prices. Pilbara Minerals and Lynas were among the top gainers. However, the market also saw declines, with Neuren facing a significant drop after a short-seller report. ASX Ltd, IAG, QBE, and Cleanaway also recorded losses, while GQG Partners and Charter Hall Retail REIT reported positive developments, the former reaching a record high in funds under management.
Leaders
BRN-Brainchip Holdings Ltd (+24.56%)
NVX-Novonix Ltd (+22.14%)
LTR-Liontown Resources Ltd (+10.71%)
TLG-Talga Group Ltd (+10.45%)
SYR-Syrah Resources Ltd (+10.44%)
Laggards
NEU-Neuren Pharmaceuticals Ltd (-16.94%)
ING-Inghams Group Ltd (-12.38%)
GNX-GENEX Power Ltd (-8.11%)
CU6-Clarity Pharmaceuticals Ltd (-7.91%)
DTL-Data#3 Ltd (-7.00%)