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The share market finished little changed at the start of a huge week of corporate earnings and economic data as gains in miners and utilities offset pressure on tech firms and healthcare providers.
The S&P/ASX 200 traded in a tight 27-point range before finishing 1.6 points or 0.02 per cent lower.
Travel stocks were boosted by a positive trading update from Flight Centre. Iron ore producers rallied after the Chinese government unveiled a plan to support property developers.
What moved the market
Last week’s strong market rebound began to lose momentum on Friday and slowed again today ahead of key risk events. Investors appear reluctant to make additional bets before trading updates this week from Rio Tinto, Fortescue Metals and other miners, a domestic inflation report on Wednesday, a US central bank rates decision and a swag of US corporate earnings.
“Tucked in between an FOMC meeting, U.S Q2 GDP data, and earnings reports from U.S mega tech is the release of Australian Q2 inflation data. A firmer AU Q2 CPI number on Wednesday, followed by a hawkish Fed on Thursday morning, would raise the chances that the RBA opts for a 65 or 75bp rate hike when it meets next Tuesday,” Tony Sycamore, senior market analyst at City Index, said.
Oil, cryptocurrencies and other risk assets retreated. Brent crude sagged 81 US cents or 0.8 per cent this afternoon to US$102.39 a barrel. Bitcoin dropped 3.7 per cent to US$21,907.
In Asia, the Dow gave up 0.92 per cent, China’s Shanghai Composite 0.73 per cent, Hong Kong’s Hang Seng 1.16 per cent and Japan’s Nikkei 0.79 per cent.
US equity futures continued to lose altitude following a losing end to last week. S&P 500 futures dipped 0.2 per cent.
“US and European futures are trading lower as traders are hesitating to back riskier assets ahead of big tech earnings week and Fed’s monetary policy decision. The Fed has shown that it wants to tame inflation at any cost and a threat of a recession isn’t going to deter them from their current plan,” Naeem Aslam, chief market analyst at AvaTrade, said.
Winners’ circle
A rebound in iron ore boosted the major miners. The most-traded contract on the Dalian Commodity Exchange jumped 7.15 per cent across the weekend after China unveiled plans for a fund to address a property crisis. The war-chest will be used to buy and complete unfinished projects for rental.
Fortescue Metals rallied 2.36 per cent to a three-week high. BHP tacked on 1.63 per cent and Rio Tinto 0.91 per cent.
Flight Centre climbed 2.98 per cent after announcing it broke even in the first half after suffering heavy losses during the pandemic. The travel agent trimmed its expected full-year underlying loss to $180-$190 million from previous guidance of $195-$225 million.
“After an incredibly challenging period, we were pleased to achieve our goal of returning to monthly underlying EBITDA profitability in both the corporate and leisure sectors late in the year,” managing director Graham Turner said.
The news boosted other companies in the travel industry. Webjet firmed 1.19 per cent, Corporate Travel Management 2.91 per cent and Qantas 1.77 per cent.
Diversified miner South32 improved 0.85 per cent after meeting full-year cost guidance and 99 per cent of copper production guidance. The miner also reported quarter-on-quarter increases in alumina, aluminium, copper, nickel and managanese.
Renewable energy outfit Genex Power soared 44.44 per cent to 19.5 cents on takeover interest from a major shareholder and a partner. Skip Essential Infrastructure Fund and Stonepeak Partners lodged a conditional, non-binding indicative offer to acquire Genex at 23 cents per share.
Doghouse
Payment solutions provider EML dived 22.18 per cent on news compliance issues in Ireland were expected to drag on into next year. The firm said it had completed “significant work” at the direction of the Central Bank of Ireland but had more to do.
Oz Minerals retreated 3.74 per cent after a quarter affected by Covid absenteeism, supply-chain disruptions and inflationary pressures. Costs increased as copper production declined from Q1. Gold production increased.
Investment manager Perpetual eased 3.65 per cent after reporting an 8 per cent decline in assets under management last quarter. The firm said growth in expenses was expected to be at the upper end of guidance.
Nanosonics sank 7.79 per cent following a business update. The infection prevention specialist expects full-year revenue to be 17 per cent ahead of last financial year at $120.3 million. The update provided no information on margins or costs, two issues at the forefront of investor concerns this reporting season.
Heavyweight drags included Wesfarmers -1.28 per cent, Telstra -1.01 per cent and CSL -0.84 per cent.
Other markets
Gold eased US$4.50 or almost 0.3 per cent to US$1,722.90 an ounce following its first positive week in six.
The dollar edged up 0.05 per cent to 69.07 US cents.
