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Fresh stimulus measures in China and a generally positive round of trading updates helped the share market rally for a second day after Wall Street broke a three-session losing run.
The S&P/ASX 200 climbed 50 points or 0.71 per cent to 7048.
Shareholders applauded earnings reports from Qantas and Nine Entertainment. Updates from Woolworths and Flight Centre were less well-received.
Pendal accepted an improved takeover offer from Perpetual that will create a regional investment powerhouse.
What moved the market
A huge day of corporate earnings delivered more positives than negatives. Besides Qantas and Nine Entertainment, the session produced healthy gains for Insignia Financial, IDP Education, Qube, Charter Hall Group and Judo Capital.
With the season now in its latter stages, this year’s key themes have been increases in both profits and expenses. Of the 116 of the index’s component companies that have reported, net profit improved 81.7 per cent, according to CommSec. A knockout result from BHP accounted for a significant portion of that figure. Minus BHP, the average profit increase was 62.3 per cent.
However, expenses increased 8 per cent as companies battled inflation, supply-chain issues, wage increases and higher input costs. Dividends increased a tepid 0.4 per cent, a sign companies were keen to retain cash for the uncertain year ahead.
Commodity stocks advanced after China announced a package of measures to support the economy. The State Council allocated fresh funds for infrastructure spending to help soften the blow from Covid lockdowns and a property downturn.
“The announcement of another round of economic stimulus in China to the tune of 1 trillion yuan focused on infrastructure projects also appears to have boosted the local bourse. However, while officials continue to pursue Covid Zero, the size of the package means its impact will be limited,” Tony Sycamore, market analyst at City Index, said.
Also helping sentiment was a pause in selling on Wall Street ahead of an annual gathering of central bankers in the US tonight. The S&P 500 edged up 0.29 per cent overnight to its first gain in four sessions.
US futures rallied this afternoon in another indication markets may have completed their pre-positioning for an address by Federal Reserve Chair Jerome Powell tomorrow night Australian time. S&P 500 futures firmed 15 points or 0.37 per cent.
Winners’ circle
Uranium stocks took wing after Japan announced plans to restart idled nuclear power plants and develop new reactors. The move came as public opinion softened towards nuclear power as energy prices soared in the wake of Russia’s invasion of Ukraine.
Paladin Energy jumped 11.56 per cent, 92 Energy 19.32 per cent, Elevate Uranium 23.46 per cent and Deep Yellow 18.3 per cent.
Qantas flew up 7.05 per cent after announcing a share buyback and forecasting international flight capacity will return to normal next year. CEO Alan Joyce said leisure travel was running at 125 per cent of pre-Covid levels. Business travel was nearing full recovery at 90 per cent.
Nine Entertainment hiked its dividend by a third to seven cents per share after reporting a full-year net profit of $315 million. Shares in the media group climbed 9 per cent.
Asset manager Pendal jumped 8.4 per cent after agreeing to an improved takeover offer from rival Perpetual. The deal will create a global powerhouse with funds under management of more than $201 billion. Perpetual CEO and Managing Director Rod Adams will lead the combined group. Shares in Perpetual slid 9.44 per cent.
A rebound in earnings and revenue lifted student placement service IDP Education 7.46 per cent. Adjusted full-year earnings improved 127 per cent to $163 million. Revenue increased 50 per cent as international students resumed overseas study.
A 59 per cent surge in full-year net profit to $234.5 million boosted Insignia 11.36 per cent. The financial services group reported margins doubled after the acquisition of MLC.
Ports operator Qube rallied 8.49 per cent after hiking its dividend by 16.7 per cent to 7 cents per share. Full-year underlying revenue grew 26.6 per cent to $2.6 billion. Net profit improved 39.2 per cent.
Record full-year earnings and cashflow helped lift South32 0.95 per cent. The diversified miner swung to a $2.669 billion profit as underlying revenue jumped 45 per cent. Underlying earnings soared 432 per cent to $2.6 billion.
Charter Hall Group climbed 6.54 per cent on record full-year earnings of $542.8 million.
Among other companies reporting, Cromwell Property gained 0.63 per cent, Costa Group 1.11 per cent, Judo Capital 6.56 per cent, Link Administration Holdings 0.46 per cent, McPherson’s 1.29 per cent, Platinum Investment 3.57 per cent, Humm 5.41 per cent, Ardent Leisure 7.14 per cent, Regis Healthcare 1.45 per cent and Macquarie Telecom 1.93 per cent.
Appen shed 1.2 per cent, Eagers Automotive 1.13 per cent, SkyCity Entertainment 1.87 per cent, Viva Energy 1.08 per cent and Allkem 0.94 per cent.
Doghouse
Woolworths fell 3.21 per cent after sales were dented by supply-chain disruptions, product shortages and staff shortages. Group sales declined 9.6 per cent to $60.849 billion. Earnings slipped 2.7 per cent to $2.69 billion.
Retailer City Chic Collective tumbled 19.31 per cent after a blowout in inventory hampered cashflow, and earnings fell short of the market consensus. The company aims to reduce inventory by at least a third from $195.9 million. Trading margins contracted from 62.8 per cent to 59.9 per cent.
Whitehaven Coal reversed 1.39 per cent from record levels after warning capital expenditure could double next year. The miner reported record revenue of $4.9 billion and record net profit of $2 billion for FY22.
Travel agent Flight Centre fell 4.56 per cent after reporting a full-year loss of $287.2 million.
Buy now pay later player Zip Co faded 2.06 per cent as a 51 per cent increase in transaction volumes year-on-year failed to help investors look past a $1.1 billion full-year loss. The company said it was reducing cash burn to accelerate the path to profitability.
Other markets
Hong Kong’s Hong Seng rallied 1.68 per cent after the market open was delayed as a typhoon menaced the city. The Asia Dow gained 0.94 per cent, China’s Shanghai Composite 0.29 per cent and Japan’s Nikkei 0.69 per cent.
Oil built on a three-week high. Brent crude rose 61 US cents or 0.6 per cent to US$100.95 a barrel.
Gold rose for a third session, advancing US$7.60 or 0.4 per cent to US$1,769.10 an ounce.
The dollar caught an uplift from Chinese stimulus news, rising 0.7 per cent to 69.53 US cents.
