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Aussie shares eked out a third day of gains as investors mulled mixed leads from the US, a soft trading update from NAB and conflicting signals about the outlook for interest rates.
The S&P/ASX 200 edged up nine points or 0.13 per cent. The index overcame mild early weakness to set a new eight-week closing high.
Gains in battery metals miners, telecoms and tech stocks outweighed pressure from the financial sector.
What moved the market
Global markets have fallen into a holding pattern ahead of a US inflation report tomorrow night that could set the tone for the next few weeks. The ASX 200 swung several times today from negative to positive territory and back again.
Mixed leads from Wall Street and muddled signals from gauges of business and consumer confidence did little to provide direction. The S&P 500 dipped 0.12 per cent overnight to a third-straight minor loss. The Dow edged up less than 0.1 per cent.
Back home, the views from the executive suite and main street have seldom seemed further apart. Reports today showed business confidence and conditions rebounded strongly last month while consumer confidence collapsed.
NAB’s business confidence index lifted seven points to +7, back above the long-term average. Business conditions improved six points to +20.
Meanwhile, Westpac’s consumer sentiment index showed Australians were almost as pessimistic as during the GFC or at the height of the pandemic. The gauge declined 3 per cent to 81.2. The index has fallen every month since November 2021 for a total decline of 22.9 per cent. A separate weekly gauge by ANZ and Roy Morgan dropped 4.5 per cent last week, erasing three weeks of improvement.
The reports added to the challenges facing the Reserve Bank when assessing the path for interest rates. Businesses are booming, so consumers must be spending, even while growing more fearful about the future. For inflation to come down, consumer demand will have to wane.
“The interesting point is that consumers – and increasingly gloomy consumers – are still spending freely despite higher interest rates and higher prices for a raft of goods and services. It all gets down to jobs and wages – as long as people have work and pay rates are lifting, then they will continue to spend,” CommSec’s chief economist Craig James said.
Winners’ circle
This week’s spectacular rally in battery metal miners continued in the wake of progress with the US’s climate bill through Congress. A late sell-off took some of the shine off strong morning gains.
Lake Resources rallied 15.35 per cent to a seven-week high. Liontown held on to a gain of 5.28 per cent, Nickel Industries 6.02 per cent and Core Lithium 2.94 per cent.
A record year lifted News Corp 5.89 per cent. The media giant reported an 11 per cent increase in full-year revenues to US$10.39 billion, aided by a surge in profitability at its Dow Jones business. Net income jumped 95 per cent to US$760 million.
News Corp’s majority-owned property listings group REA gained 6.69 per cent after growing full-year net profit by 25 per cent and increasing its dividend by the same percentage. The group expects positive operating jaws for Australia this fiscal year even as property prices moderate.
Rival Domain Holdings ran even harder, rising 8.97 per cent.
Coronado climbed 5.61 per cent as strong coal prices helped the miner deliver record half-year revenue, income and adjusted earnings. The average realised metallurgical coal price of $292.80 a tonne was 193 per cent higher than the prior corresponding period.
“These strong results are due to the higher price environment, which has resulted in record price realisations for our high-quality metallurgical coal products, but also from the structural changes made to our business over the past 12–18 months that have allowed us to take advantage of the improved markets,” chief executive and managing director Gerry Spindler said.
Megaport surged 10.02 per cent as advances in revenues and earnings helped reduce its full-year loss. The tech platform provider’s revenue jumped 40 per cent to $109.7 million. Normalised earnings improved 23 per cent. The net loss for the year was $48.5 million, 12 per cent less than FY21.
Doghouse
NAB shares fell 2.93 per cent after the bank reporting rising expenses largely offset the tailwind from higher rates last quarter. Both cash earnings and expenses increased 3 per cent. Net interest margin was “slightly lower”.
The bank reported a $1.85 billion unaudited statutory net profit. The report helped drag CBA down 1.29 per cent, Westpac 0.77 per cent and ANZ 0.92 per cent.
While financials were the biggest weight, utilities and consumer staples also declined. APA Group shed 1.88 per cent, AGL Energy 1.28 per cent, Coles 0.37 per cent and Woolworths 0.21 per cent.
Imugene eased 5.26 per cent, De Grey Mining 2.46 per cent and Block 2.18 per cent.
Other markets
US futures shrugged off a generally negative session in Asia. S&P 500 futures firmed nine points or 0.2 per cent.
The Asia Dow lost 0.86 per cent, Hong Kong’s Hang Seng 0.01 per cent and Japan’s Nikkei 0.85 per cent. China’s Shanghai Composite bucked the trend with a slim rise of 0.04 per cent.
Gold declined US$1.20 or 0.07 per cent to US$1,804 an ounce.
Brent crude overcame early weakness to advance eight US cents or 0.1 per cent to US$96.73 a barrel.
The dollar eased 0.24 per cent to 69.72 US cents.
