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Aussie shares shrugged off weak leads and fresh warnings about the economic impact of the Covid-19 virus, rising for the first time in three sessions.
The ASX 200 traded in a tight 22-point band before reaching the halfway mark 12 points or 0.2 per cent ahead at 7126. The advance followed a soft night on world markets after a profit warning from bellwether Apple dragged US and European stocks lower.
A busy morning of corporate earnings reports underlined Apple’s caution about the economic damage from the coronavirus outbreak, with tech giant Wisetech, shopping mall owner Vicinity Centres, gaming giant Crown Resorts and online travel agent Webjet among those acknowledging threats to the bottom line.
Wisetech crashed 20.5 per cent after the tech leader cut its full-year earnings guidance from $145 – $153 million to $114 – $132 million. CEO Richard White said, “The unexpected outbreak of coronavirus and the effective shutdown of China… is creating negative flow-on effects to manufacturing, slowing supply chains and economic trade across the world.”
Vicinity Centres fell 3.4 per cent to its weakest level since 2018 after the real estate trust downgraded its full-year outlook, citing a drop in foot traffic at some of its centres due to a drop-off in international visitors. Crown Resorts said it experienced softer trading conditions over the Lunar New Year due to travel restrictions. Shares edged up 0.3 per cent despite an 11 per cent fall in net profit to $172.7 million. Webjet also noted the virus, but saw its shares rise 7.5 per cent as the company predicted a rebound in earnings once the worst of the crisis has passed.
Wesfarmers forged a new all-time high, rising 3.1 per cent to $46.65after declaring a 5.7 per cent increase in half-year net profit after tax to $1.1 billion and selling almost a third of its stake in Coles. The retail giant announced it had sold 4.9 per cent of its Coles holding for $1.05 billion, reducing its stake to 10.1 per cent. Shares in Coles, which traded at a record last week, sank 4.1 per cent.
A sharp decline in betting helped sent Tabcorp shares down 5.1 per cent. A 4.9 per cent decline in digital wagering turnover was partly offset by a 12.4 per cent jump in lotteries and Keno revenue.
Iron ore miner Fortescue rose 1.2 per cent after declaring record half-year revenue of $US6.5 billion. Net profit after tax increased 281 per cent to $US2.5 billion. Waste manager Cleanaway was the index’s best performer, surging 14.6 per cent after raising underlying half-year net profit after tax by 13.7 per cent to $76.2 million.
Commonwealth Bank was among the biggest drags on the index, falling 2.8 per cent as it traded without its $2 dividend. Westpac shed 0.5 per cent after warning of a potential earnings hit from insurance claims from bushfires, and regulatory and class actions against the bank.
A subdued morning in Asia
saw China’s Shanghai Composite retreat 0.24 per cent, Hong Kong’s Hang Seng
add 0.15 per cent and Japan’s Nikkei gain 0.31 per cent. S&P 500 index futures
inched higher, lately up six points or 0.2 per cent.
Brent crude futures slipped four cents
or less than 0.1 per cent this morning to $US57.72 a barrel. Gold advanced $2.30 or 0.1 per cent to
$US1,605.90 an ounce.
The dollar rebounded 0.04 per cent to 66.87 US cents.
What’s hot today and what’s not:
Hot today: One of the ASX’s most shorted stocks hit its highest level in almost three years as it continued to defy the sceptics. Shortsellers had a morning to forget as Domino’s Pizza (ASX:DMP) rose 10.4 per cent to its strongest level since May 2017. The company announced a 10 per cent lift in half-year earnings before interest and tax to $151 million as strong European sales offset weak domestic demand. The company has more than tripled its number of stores and sales in a decade.
Not today: Fintech EML Payments (ASX:EML) hit an all-time high on Monday, but paid the price of over-elevated expectations this morning after moderating its revenue guidance. A 25 per cent increase in half-year revenue to $59.2 million and 70 per cent increase in half-year net after-tax profit to $16 million were apparently overshadowed by news the company now expects full-year revenue of $120 – $129 million, versus previous guidance of $116 – $132 million. The share price was lately down 10.3 per cent at $4.98 after falling as low as $4.67.
