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The share market overcame early pressure and a mixed bag of earnings to close at a ten-week high.
Poorly-received trading updates from CSL and Santos helped push the market down as much as 22.5 points in morning action.
News that wages grew less than expected last quarter triggered a reverse as traders bet the data eased pressure on the Reserve Bank to keep raising rates aggressively.
The S&P/ASX 200 swung to a gain of 22 points or 0.31 per cent.
What moved the market
The market struggled in early trade as two of the benchmark’s three largest companies declined. Commonwealth Bank ultimately proved the biggest drag, falling 1.81 per cent as its shares traded without the right to the next dividend.
Health giant CSL accounted for much of the intraday reversal, closing just 1.32 per cent lower after initially falling almost 6 per cent. The biotech sank after weak plasma collections during the pandemic and higher costs dented profits. Full-year net profit declined 6 per cent to $2.255 billion, near the top end of guidance. Revenues increased 3 per cent.
The company expects profits to grow this fiscal year as pandemic headwinds subside and plasma collections improve. Costs will remain elevated.
A busy day of corporate earnings also included updates from Santos, Magellan, Domain Holdings, Brambles, Super Retail Group and Fletcher Building. More below.
The index reversed a morning decline after data showed wages did not grow as fast as expected last quarter, potentially easing pressure on the RBA to hike rates.
The Wage Price Index grew 0.7 per cent in the three months to the end of June, missing expectations for an increase of 0.8 per cent. Annual growth of 2.6 per cent was the strongest in eight years, but also just below consensus.
“After three quarters of consistent wage growth, driven mostly by wage rises across the private sector, the annual rate of growth was 2.6 per cent. This is the highest annual rate of wages growth since September 2014,” Michelle Marquardt, head of Prices Statistics at the ABS, said.
The Dow and S&P 500 rallied overnight as robust earnings from retailers soothed concerns about the demand impact of higher prices. The Dow put on 0.71 per cent. The S&P 500 added 0.19 per cent.
“Earnings from Walmart and Home Depot show that high inflation has not yet slowed consumer spending, which has been driving the world’s biggest economy. A clearer picture of the trend in consumer spending will emerge when more retailers such as Target report their results today,” Kunal Sawhney, chief executive of research group Kalkine, said.
Winners’ circle
Supply-chain logistics specialist Brambles hit a 12-month high after beating guidance. The share price jumped 5.08 per cent on news underlying profit increased 10 per cent to US$930 million. Sales revenues expanded 9 per cent.
Record full-year sales boosted Super Retail Group 4.7 per cent. The automotive parts retailer reported a 44 per cent increase in online sales.
Bapcor edged up 1.18 per cent after hitting its full-year profit guidance. The Autobarn owner reported a record statutory net profit of $125.8 million.
A 42 per cent increase in full-year net profit helped lift Fletcher Building 2.84 per cent.
Takeover target Nearmap gained 3.9 per cent after reporting year-on-year growth in contracts of 25 per cent.
Aside from companies reporting, the index’s best performers were fund manager Challenger +5.62 per cent, retailer City Chic Collective +4.72 per cent and coal miner New Hope +4.34 per cent.
At the heavyweight end, Wesfarmers gained 2.23 per cent, Goodman Group 2.48 per cent and Woolworths 2.02 per cent.
Doghouse
A 300 per cent bounce in half-year profits failed to keep Santos in positive territory. The energy giant’s shares slid 2.4 per cent. Underlying profit expanded to US$1.267 billion as oil and gas prices rocketed.
Corporate Travel Management sank 1.44 per cent despite swinging back into profit. Full-year net profit improved to $3.1 million from a loss of $55.4 million in FY21. Revenues more than doubled to $377.4 million as business travel picked up.
A 16.5 per cent decline in full-year profit to $15.6 million weighed on Downer EDI. Shares in the engineering group dropped 5.17 per cent.
Domain Holdings fell 4.2 per cent after warning costs will increase this fiscal year while margins remain steady. The property listings group reported a full-year after-tax profit of $35.1 million.
Online marketplace Redbubble plunged 31.44 per cent after swinging to a full-year loss as a sales boost from masks wore off. The company reported a full-year loss of $24.6 million, down from a profit of $31.2 million in FY21.
Investment manager Magellan fell 5.87 per cent as a 9 per cent decline in funds under management overshadowed a 44 per cent jump in statutory net profit. Adjusted net profit declined 3 per cent.
Other markets
A positive session on Asian markets saw the Asia Dow gain 0.9 per cent, Hong Kong’s Hang Seng 0.77 per cent, Japan’s Nikkei 1.12 per cent and China’s Shanghai Composite 0.26 per cent.
S&P 500 futures firmed 4.5 points or 0.1 per cent.
Oil clawed back a portion of last night’s 2.9 per cent loss. Brent crude bounced US$1.08 or 1.2 per cent to US$93.42 a barrel.
Gold bounced US$5.90 or 0.3 per cent to US$1,795.60 an ounce.
The dollar inched up 0.05 per cent to 70.23 US cents.
