Join our daily newsletter At The Bell to receive exclusive market insights
The share market finished little changed as news that China’s economy performed better than expected last quarter helped offset declines in commodity prices.
The S&P/ASX 200 dipped two points or 0.03 per cent from yesterday’s eight-month closing high.
Supermarkets, property stocks and healthcare providers outperformed as traders turned defensive after eight advances in the previous nine sessions. Commodity stocks retreated with iron ore, oil and most metals. Origin Energy dragged as a proposed takeover hit a delay.
What moved the market
A US market holiday overnight and subdued US equity futures capped buying interest despite upbeat Chinese economic data.
China’s economy expanded by 2.9 per cent in the last three months of 2022, down from growth of 3.9 per cent the previous quarter but almost twice as much as the 1.6 per cent anticipated by economists.
The upside surprise came as industrial production, employment and retail sales held up better in December than anticipated as the government relaxed Covid restrictions. Industrial production expanded by 1.3 per cent. Unemployment fell to 5.5 per cent from 5.7 per cent in November. Retail sales contracted by less than expected.
“The overall economic and social development was stable and healthy,” Kang Yi, head of the National Bureau of Statistics told a press conference.
“However, the foundation of domestic economic recovery is not solid as the international situation is still complicated and severe while the domestic triple pressure of demand contraction, supply shock, and weakening expectations is still looming,” Kang said, according to state media.
Australian investors appeared wary of adding to positions while Wall Street was closed for the Martin Luther King Jr public holiday. US equity futures remained underwater this afternoon despite modest gains in Europe overnight. The pan-European Stoxx 600 index advanced 0.4 per cent, stretching its gain for the year to 6.6 per cent.
S&P 500 futures were down 13 points or 0.3 per cent as the Australian market closed.
Winners’ circle
A week-long rally in healthcare providers accelerated this session. ResMed climbed 1.72 per cent to a one-month high following an upgrade to “overweight” from JPMorgan. CSL gained 1.27 per cent, Healius 0.61 per cent and Fisher & Paykel Healthcare 1.83 per cent.
Consumer staples was the day’s big winner, rising 1.8 per cent as Metcash put on 2.74 per cent, Coles 2.02 per cent and Woolworths 2.45 per cent. Endeavour Group firmed 2.04 per cent.
Property stocks were also strong. Charter Hall Group tacked on 1.97 per cent, Goodman Group 1.94 per cent and Lendlease 1.68 per cent.
Other heavyweight gains included James Hardie +1.8 per cent, Telstra +1.74 per cent and Wesfarmers +0.82 per cent.
Doghouse
Bulk metal miners declined as a Chinese crackdown on alleged price manipulation kept the pressure on iron ore prices. Ore dropped another 1.1 per cent this afternoon on the Dalian Commodity Exchange after falling 4.3 per cent yesterday.
Fortescue Metals declined 1.34 per cent. BHP reversed 1.11 per cent from yesterday’s all-time high.
Rio Tinto shed 1.23 per cent after reporting a 1 per cent increase in iron ore production last year. The miner increased its copper output by 6 per cent and bauxite by 1 per cent. Aluminium declined 4 per cent.
Capricorn Metals shed 5.63 per cent, Regis Resources 4.82 per cent and Core Lithium 4.23 per cent.
Record half-year sales and earnings propelled JB Hi-Fi briefly to an eight-month high. At $5.278 billion, the retailer’s sales were 8.6 per cent stronger than the same period last year. Earnings jumped 14 per cent and net profit 14.6 per cent. The share price traded as high as $49.72 before fading 1.25 per cent to $46.51
“We are pleased to report record sales and earnings for HY23 as trading conditions started to normalise following two years of Covid related disruptions,” Group CEO Terry Smart said.
Origin Energy fell 2.09 per cent to $7.49 after a consortium led by Brookfield Asset Management asked for more time to conduct due diligence relating to an indicative, conditional and non-binding takeover offer of $9 per share. The consortium’s exclusivity arrangement with Origin expires on January 24.
Portfolio management platform HUB24 sagged 4.47 per cent after reporting a decline in fund inflows last quarter compared to the same period last year. Platform net inflows in Q2 were flat from Q1, but 23.6 per cent lower than Q2 in FY22. Net inflows of $5.8 billion for the half were down 13.6 per cent from the prior corresponding period.
Fund administrator Link Group slid 2.51 per cent on news of a class action against a UK subsidiary. The group action served by law firm Leigh Day relates to Link’s role as overseer of an equity income fund that collapsed in 2019. Link said it will “vigorously defend” the proceedings.
Beauty and wellness firm McPherson’s eased 0.68 per cent after warning profits declined in the first half. Margin pressure and increased marketing costs helped knock underlying profit before tax down to $5 million from $6.7 million in the prior corresponding period.
A ratings downgrade from Morgan Stanley dragged autoparts firm Bapcor down 4.68 per cent to $6.42. The broker slashed its price target from $7 to $6.
Other markets
A mixed session on Asian markets saw China’s Shanghai Composite decline 0.25 per cent and Hong Kong’s Hang Seng lose 1.01 per cent. The Asia Dow firmed 0.26 per cent. Japan’s Nikkei gained 1.31 per cent.
Oil overcame early weakness. Brent crude rallied 21 US cents or 0.25 per cent to US$84.67 a barrel.
Gold pulled back from an eight-month high. The yellow metal dropped US$7.60 or 0.4 per cent to US$1,914.10 an ounce.
The dollar bounced 0.13 per cent to 69.72 US cents.
