Weekly Small Cap Wrap: Markets off to a strong start to 2023 as ASX Small Caps Lead the Market

• Startup index lifted this week, up 5.35%
• 6 ASX sectors ended the week in red and 5 in green
• Cyclone Metals Acquires Major Iron Ore Block 103 Project in Canada

At the start of a new year and after a volatile 2022, investors around the world have crossed their fingers for a positive start to 2023.

The S&P/ASX Emerging Companies (XEC) is a benchmark of Australian micro-cap companies and includes up to 200 stocks ranked between 350 and 600 by float-adjusted market capitalization at the time of inclusion in the index. increase. By 4pm Friday, ASX XEC has gained 5.52% over the past week.

The S&P/ASX 200 (XJO) is Australia’s leading benchmark index and home to the top 200 ASX-listed companies by float-adjusted market capitalization. It didn’t fare so well, but it continued to climb 1.27% this week.

The 11 ASX divisions had mixed results, with 6 in red and 5 in green. Leading the winner was the materials sector, where he rose 4.61% over the past five days (focus on last Friday, as Monday is a holiday).

Consumer goods rose 3.4%, while industrial goods rose 0.56%. Healthcare fell more than 2%, leading the laggards, while energy fell 2.15% and consumer staples fell 1.28%.

Weekly economic overview

Global markets continue to react to key economic data and indications as to whether central banks will remain hawkish on their approach to 2023 interest rates to curb inflation that dominated much of the economic debate last year. doing.

One of the latest key data points released overnight in the US was the jobs report, which showed companies added more positions in December than expected.

US employment rose by 235,000 from 182,000 in November, putting pressure on the US Federal Reserve (Fed) to raise interest rates at its February 1 meeting.

The minutes of the December 13-14 Federal Reserve meeting released this week show that policymakers are prepared to keep interest rates high for some time to keep inflation in check.

Fed policymakers were concerned about a market “misunderstanding” that the Fed’s commitment to fighting inflation was waning, according to the minutes.

But policymakers acknowledge the need to balance the fight against inflation with the risk of an economic slowdown.

As stock head Eddy Sunarto reports that experts believe the market in 2023 will depend on economic data and how companies plan to adapt to the impending recession.

Investors are also nervous about China’s decision to lift COVID-19 restrictions and its impact on the global economy.

IMF Managing Director Kristalina Georgieva has warned that it will be “a tough year, a tougher year than we’ll be left behind.”

“We expect a third of the global economy to go into recession,” said Georgieva.

“Why? Because the US, EU and China are all slowing down at the same time.”

ASX Small Cap Winners:

Here are the best performing ASX small caps from January 3-6.

Swipe or scroll to see the entire table. Click a heading to sort:

Minnow supported by Tony Sage Cyclone Metals (ASX:CLE) has acquired the Block 103 project in Canada. The project has been called “the world’s largest undeveloped magnetite iron ore project.”

Block 103 covers 7,275 hectares of the Labrador Trough, one of the world’s largest iron ore belts, accounting for 99% of Canada’s iron ore.

Based on 4km of 12km strikes, there are 7.2 billion tonnes of historical non-JORC resources, grading 29.2% iron.

CLE said more than $35 million has been spent on the project so far.

Lindian Resources (ASX:LIN) today reported “excellent” high-grade rare earth analysis at the Kangankunde Rare Earth Project in Malawi. This includes 12 meters at 4.2% TREO from the surface of drilled hole KGKRC00.

According to LIN, both holes have very high rare-earth grade mineralization and are widely intersected by non-radioactive material along the entire length of the holes, making NdPr an important battery for use in electric vehicles and wind turbines. Contains most of the metallic elements.

“These initial assay results have been absolutely excellent in terms of grade, distribution and continuity, and the steady stream of subsequent assays will provide more of the same results, with Kangankunde rapidly emerging in 2023.” We are confident that we can build a case for a rare earth project of global significance in terms of grade, scale and non-radioactivity,” said CEO Alistair Stephens.

ASX Small Cap Losers:

Here are the worst performers for ASX small caps from January 3rd to 6th:

Swipe or scroll to see the entire table. Click a heading to sort:

Invictus Energy (ASX:IVZ) It was the biggest delay of the week stock head Gregor Stronach described it as a shocking series of technical problems at the Mukuyu-1 well, which is currently being drilled under the 80%-owned SG 4571 license in Zimbabwe’s Cabora Bassa Basin.

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