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The share market reversed into a new week as earnings season offered as many misses as hits and the banks extended their recent retreat.
The S&P/ASX 200 fell 32 points or 0.5 per cent following a lacklustre end to last week on Wall Street. The S&P 500 in the US closed almost flat at -0.02 per cent after failing for a third session to regain its February all-time high.
While Wall Street has recouped almost all of its coronavirus losses, the Australian recovery has stalled more than 14 per cent short of its former peak, due in large part to our dependence on the big four banks and their exposure to the economic fallout from the pandemic. The financial sector led the index’s losses this morning with a decline of 1.4 per cent.
Commonwealth Bank, which has been in retreat since reporting last Wednesday, this morning shed 1 per cent. ANZ gave up 1.7 per cent, NAB 2.2 per cent and Westpac 2 per cent. The nation’s fifth largest bank, Bendigo & Adelaide, sank 5.6 per cent after deferring its final dividend to preserve capital following a 48.8 per cent slump in full-year net profit to $192.8 million. CEO Marnie Baker declined to provide guidance for this financial year, citing challenging market conditions.
The morning’s worst performer was household fittings and fixtures manufacturer GWA Group, down 8.5 per cent after a decline in construction helped knock its full-year earnings down 8 per cent to $71.8 million. The market was more forgiving of a 91 per cent plunge in statutory net profit at Bluescope. The steelmaker shook off early losses to reach mid-session 0.8 per cent ahead.
Lendlease also offered a buying opportunity for investors willing to look beyond this year’s statutory full-year after-tax loss of $310 million. The construction group’s share price put on 0.8 per cent after falling more than 4 per cent at the open.
Retailers reporting earnings experienced mixed fortunes. JB Hi-Fi jumped 4.9 per cent to an all-time high as a 50 per cent bump in online sales helped cap a record year. Online retailer Kogan retreated 6 per cent from Friday’s record despite a 55.9 per cent lift in full-year net profit after tax to $26.8 million.
Software builder Altium was a standout during a downbeat morning for the tech sector following a 0.2 per cent retreat in the Nasdaq on Friday. While the overall sector sagged 1 per cent, Altium rose 1.9 per cent after lifting full-year revenue 10 per cent to US$189 million and growing its subscriber base by 17 per cent. Computershare eased 2.6 per cent, Afterpay 2 per cent and Xero 1.7 per cent.
Beach Energy cushioned the energy sector from a deeper loss, climbing 4.6 per cent after announcing a full-year net profit after tax of $501 million and a final dividend of one cent a share. Ampol slumped 3.5 per cent on news it will spin out half of its service stations into an unlisted property trust. Ampol will retain a 51 per cent controlling interest in the trust, with the other 49 per cent acquired by Charter Hall and GIC.
The market mood was brighter in Asia, where China’s Shanghai Composite and Hong Kong’s Hang Seng both gained 1.2 per cent. Japan’s Nikkei dipped 0.6 per cent.
S&P 500 index futures in the US rose 14 points or 0.4 per cent as oil rebounded ahead of Wednesday’s meeting of the Organization of the Petroleum Exporting Countries and allies. Brent crude bounced 35 cents or 0.8 per cent to $US45.15 a barrel. Gold edged up $1 or 0.1 per cent to $US1,950.80 an ounce.
The dollar climbed 0.33 per cent to 71.95 US cents.
What’s hot today and what’s not:
Hot today: Mineral explorer BMG Resources (ASX:BMG) jumped 64.3 per cent after announcing a deal to secure three gold projects in WA by acquiring all the shares in Oracle Mining Limited. The agreement gives BMG the Abercromby Project in Wiluna, the Invincible Project in the Pilbara and the South Boddington Project near Newmont’s Boddington deposit. The purchase will be funded through a capital raising.
Not today: Shares in Unibail-Rodamco-Westfield (ASX:URW) flopped back towards pandemic lows after the shopping centre operator addressed rumours about a rights issue without explicitly ruling one out. At the same time as talking up its $21 billion cash balance and undrawn credit facilities, the company said the “Supervisory Board and Management Board continue to weigh the merits of all potential strategies to strengthen URW’s financial profile.” No decisions had been made. Investors sent the share price down 5 per cent.
