Neuroscientific Biopharmaceuticals and ZIP Co lead ASX gainers as risk appetite returns to small-cap stocks

Why are investors returning to small-cap stocks on the ASX?

Australia’s equity market saw a sharp divergence on 16 April 2025, as speculative capital flowed into healthcare, mining, and fintech names. While the broader ASX indices remained mixed due to persistent macroeconomic headwinds, several micro-cap and small-cap companies posted double-digit percentage gains, underlining a re-emerging appetite for risk in specific sectors.

The day’s most notable surge came from Neuroscientific Biopharmaceuticals Ltd (ASX: NSB), whose shares jumped by 94.29% to AUD 0.068. The healthcare micro-cap attracted renewed attention from speculative investors amid market chatter surrounding its neurodegenerative disease pipeline. With a modest AUD 9.83 million market cap, the company became the top gainer by percentage change on the ASX, having now gained 17.24% over the past year.

Healthcare sentiment also lifted Prescient Therapeutics Ltd (ASX: PTX), up 28.57% to AUD 0.054, and Althea Group Holdings Ltd (ASX: AGH), which added 16.67% to AUD 0.021. Although both companies are still trading below their yearly highs, market interest was evident as investors moved into defensive yet potentially high-growth biopharma plays. Notably, Anteris Technologies Global Corp (ASX: AVR) also saw its stock rise 11.59% to AUD 4.91, despite being down nearly 79% year-on-year, pointing to renewed volatility in advanced cardiovascular medical devices.

What drove gains in the Australian mining sector?

The day’s rally extended strongly into the basic materials sector, with exploration-focused stocks dominating the top gainer list. Mindax Ltd (ASX: MDX), a miner engaged in iron ore and gold exploration, advanced 29.73% to AUD 0.096, extending its 166.67% annual gain. The AUD 220.2 million company has continued to benefit from speculative positioning around the potential recovery of China’s industrial sector and Australian ore exports.

Legacy Minerals Holdings Ltd (ASX: LGM) rose 26.53% to AUD 0.31, its stock supported by strong drill campaign updates and bullish gold price expectations. Its market capitalisation reached AUD 38.72 million, reflecting a year-to-date rally of 77.14%. RAREX Ltd (ASX: REE) also jumped 24.00% to AUD 0.031, buoyed by increasing attention on rare earth supply chains. The company’s 93.75% one-year gain reflects long-term optimism around rare earth elements, especially as Western economies diversify away from Chinese sourcing dependencies.

Other key gainers in mining included Norwest Minerals Ltd (ASX: NWM), which rose 22.22% to AUD 0.011, despite being 78.43% lower than a year ago. Verity Resources Ltd (ASX: VRL) also added 18.18% to AUD 0.013, while Australian Pacific Coal Ltd (ASX: AQC) climbed 16.36% to AUD 0.064, demonstrating renewed interest in coal supply amid energy security concerns.

Additional resource companies in the top performers list included Orion Minerals Ltd (ASX: ORN), up 15.39% to AUD 0.015, Power Minerals Ltd (ASX: PNN), which added 15.00% to AUD 0.069, and WIN Metals Ltd (ASX: WIN), gaining 14.29% to AUD 0.016. Despite year-on-year losses in several of these names, the 16 April rally highlights investors’ appetite for potential turnaround stories, especially in critical minerals and gold exploration.

How did fintech stock ZIP Co perform and what does it signal?

Among the few large-cap stocks on the day’s gainers list was ZIP Co Ltd (ASX: ZIP), which jumped 13.18% to AUD 1.68 on high turnover exceeding AUD 19.56 million. With a market capitalisation of AUD 2.19 billion, ZIP’s 41.35% year-over-year gain signals strengthening investor confidence in the buy-now-pay-later (BNPL) space, which has undergone considerable transformation over the past two years.

ZIP’s rally appears tied to its international growth strategy and recent cost-cutting initiatives, which have narrowed operating losses. The company’s performance is increasingly being viewed as a bellwether for Australia’s broader fintech sector, especially as consumer lending pivots toward embedded finance models and newer monetisation streams.

Which other sectors contributed to the ASX gainers list?

Outside of biotech, mining, and fintech, gains were recorded across energy, technology, and industrials.

In the energy sector, Tlou Energy Ltd (ASX: TOU) advanced 10.53% to AUD 0.021, despite negligible trading volume. The Botswana-based gas-to-power developer continues to appeal to investors tracking Southern Africa’s push for independent energy generation.

Sensen Networks Ltd (ASX: SNS) posted a 15.15% gain to AUD 0.038, supported by its growing footprint in AI-enabled video analytics for smart cities and surveillance applications. Its 80.95% annual return and AUD 30.14 million market cap suggest that investor interest remains strong in niche tech platforms with clear commercial applications.

FOS Capital Ltd (ASX: FOS) rose 11.54% to AUD 0.29, drawing investor attention as Australia’s lighting sector benefits from smart infrastructure upgrades and energy-efficient retrofitting. The company’s 12-month return of 26.09% and a market cap of AUD 15.6 million highlight the broader momentum behind sustainability-driven industrial solutions.

Axel Ree Ltd (ASX: AXL) rounded out the list with a 10.17% jump to AUD 0.065, even as the company remains 67.50% below its 12-month peak. With a modest AUD 6.55 million valuation, the stock reflects the high-risk, high-reward calculus guiding much of the speculative trading activity across the ASX’s micro-cap segment.

What macroeconomic and policy dynamics are shaping investor behaviour?

The April 16 rally unfolded amid broader economic uncertainty both domestically and globally. Market participants are now anticipating a potential 25-basis-point interest rate cut by the Reserve Bank of Australia (RBA) in its upcoming May meeting. With inflation showing signs of easing and household consumption slowing, policymakers are facing mounting pressure to provide a monetary buffer to support GDP growth in the second half of 2025.

Meanwhile, Australia’s export-driven sectors are navigating global trade disruptions. Tensions between the United States and China have reintroduced volatility into commodity markets, particularly in iron ore, coal, and critical minerals. These geopolitical uncertainties, however, appear to be fueling interest in local miners aligned with government-backed critical minerals strategies, including firms exploring lithium, rare earths, and gold.

The healthcare sector’s gains may also reflect defensive repositioning, as investors rotate into drug development and medical technology companies that are perceived to be insulated from trade volatility and cyclical spending trends.

What does April 16 reveal about near-term market direction?

The surge in ASX gainers on 16 April 2025 suggests that investors are willing to selectively engage with riskier assets, especially those with recovery narratives or thematic relevance. Biotech micro-caps, gold explorers, BNPL leaders, and AI-driven technology companies all drew speculative inflows, with some stocks posting one-day gains exceeding 90%.

However, the sustainability of these moves will likely depend on macroeconomic data in the weeks ahead, particularly the RBA’s rate decision, fiscal stimulus measures in China, and global trade negotiations. While the risk-on sentiment is a welcome reprieve for small-cap investors, it is unfolding in a market that remains highly reactive to external shocks and policy signals.