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A week that began with a two-month high ended with a second weekly decline despite a tepid final-session rebound.
The S&P/ASX 200 struggled to a gain of 17 points or 0.23 per cent. Under-siege casino group Crown Resorts jumped more than 16 per cent following an improved takeover offer. Commonwealth Bank rebounded from two days of heavy selling.
What moved the market
Solid falls on Tuesday and Wednesday condemned the market to a loss of 46.5 points or 0.5 per cent for a week defined by the steady decline of the nation’s most valuable export and evidence a price war was hurting home lenders.
Iron ore prices sank to an 18-month low this week, dragging the major producers back towards multi-month lows. The financial sector fell to its weakest level in six weeks after CBA blamed a 9 per cent decline in quarterly profits on shrinking profit margins as lenders compete for homebuyers.
Together, the materials and financial sectors account for almost half the market weighting of the ASX 200. Declines there were partly offset by rallies in defensive sectors. Healthcare, REITs and consumer staples all rose today for a third straight session.
Bargain-hunters dipped their toes in Commonwealth Bank shares rose at four-month lows. Shares in the bank bounced 0.36 per cent after losing 9.5 per cent in two sessions.
The domestic market has significantly underperformed Wall Street this week. With a session left, the S&P 500 was on track for a weekly gain of around 0.5 per cent. The US benchmark climbed 0.34 per cent last night as a strong quarterly reporting season neared its conclusion.
“The S&P 500 and Nasdaq Composite clinched record closes on the back of upbeat earnings from chip company Nvidia Inc. and key retailers,” Kalkine Group CEO Kunal Sawhney said. “Retailers Kohl’s and Macy’s smashed quarterly profit and revenue estimates and issued bullish outlooks ahead of the crucial holiday season, prompting a rise in retail stocks.”
Back home, trading updates at annual general meetings provided many of this week’s biggest moves. Goodman Group and Altium hit records. Other strong advances included Sonic Healthcare, Uniti Group and EML Payments. The season wraps up next week with meetings for shareholders in several household names, including Harvey Norman, Kogan and Hills.
Winners’ circle
Crown Resorts jumped 16.57 per cent following a revised takeover offer from Blackstone. The US private-equity outfit raised its non-binding offer a third time to $12.50 per share. The proposal follows previous offers of $11.85 and $12.35. The Crown board said it had yet to form a view on the offer.
Safe-and-steady defensive stocks have taken up the slack this week as the miners and banks floundered. Woolworths firmed 0.75 per cent to a three-week high. CSL gained 1.01 per cent and Wesfarmers 0.17 per cent.
Macquarie Group climbed 1.08 per cent to a new record. ANZ faded 0.66 per cent, NAB 0.49 per cent and Westpac 0.05 per cent.
Altium climbed 5.16 per cent to an all-time high following yesterday’s positive AGM trading update. Treasury Wine Estates gained 4.07 per cent off the back of yesterday announcing the purchase of a Californian wine-maker. Sonic Healthcare rose 3.19 per cent after reaffirming strong demand for its Covid testing services.
NextDC improved 0.48 per cent after reporting a strong start to FY22. The data centre specialist expects to grow revenues by 16-20 per cent and earnings by 19-23 per cent.
Footwear retailer Accent Group overcame early weakness to rise 4.28 per cent despite news that pandemic store closures knocked around $40 million off earnings over the first four months of the financial year. Retail sales were $86 million lower than management projections. However, sales and margins have recovered since NSW and Victoria reopened.
Janus Henderson shrugged off news long-term CEO Dick Weil will retire after 12 years at the helm of the asset manager. The share price climbed 2.61 per cent.
Doghouse
WiseTech retreated 2.49 per cent from record levels after reaffirming full-year guidance. CEO and found Richard White told shareholders the software maker anticipated revenue growth of 18-25 per cent and earnings growth of 26-38 per cent. The global outlook was complicated by supply-chain disruptions, capacity restraints and the threat of new Covid strains.
Infection prevention firm Nanosonics slipped 4.92 per cent after signalling a modest contraction in gross margin this year. CEO and President Michael Kavanagh said overall gross margin was expected to decline to 75 per cent from 78 per cent in FY21 due to a changing revenue mix. The company reaffirmed the full-year outlook presented in August.
Among the heavyweights, Afterpay shed 1.8 per cent, Aristocrat Leisure 1.62 per cent and Transurban 1.23 per cent.
Other markets
S&P 500 futures moved firmly higher in afternoon trade, rising 19 points or 0.4 per cent.
A mixed afternoon on Asian markets saw China’s Shanghai Composite add 0.34 per cent and Japan’s Nikkei per 0.54 cent. The Asia Dow shed 0.25 per cent and Hong Kong’s Hang Seng 1.76 per cent.
Gold pushed back towards five-month highs, rising US$3.70 cents or 0.2 per cent to US$1,865.10 an ounce.
Brent crude climbed 55 US cents or 0.7 per cent to US$81.79 a barrel.
The dollar held steady at 72.76 US cents.
