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Takeover action and a round of positive trading updates helped propel the share market towards a second-straight advance.
The S&P/ASX 200 rallied 53 points or 0.75 per cent to 7051.
Fund manager Perpetual will acquire rival Pendal to create a global investment giant. Uranium miners soared after Japan reversed its resistance to nuclear power since the Fukushima disaster.
Investors waded through a slew of earnings from household names, including Qantas, Woolworths, Nine Entertainment and Flight Centre.
What’s driving the market
The market has steadied over the last two sessions as the full-year earnings season delivered more positives than negatives. Today’s winners included Qantas, ports operator Qube, student placement service IDP Education and financial services provider Insignia. Misses included Woolworths, Flight Centre and Whitehaven Coal (more below).
Also helping sentiment was a pause in selling on Wall Street ahead of an annual gathering of central bankers in the US tonight. The S&P 500 edged up 0.29 per cent overnight to its first gain in four sessions.
US futures rallied this morning in another indication markets may have completed their pre-positioning for an address by Federal Reserve Chair Jerome Powell tomorrow night Australian time. S&P 500 futures firmed 13 points or 0.3 per cent.
“The past week has been a bit like Waiting for Godot with markets apprehensive ahead of US Fed Chair Powell’s Jackson Hole speech on Friday,” NAB’s Director, Economics, Tapas Strickland, said.
Where global equity markets go from here will depend to a large extent on how hard a line Powell takes on inflation and rates tomorrow. However, the retrace over the last week has worked off some of the excesses after the rebound from the June lows reached overbought levels.
“The pullback in the S&P500 from the 200-day ma has mostly followed the script, and there are preliminary signs of basing at the overnight 4110 low. After working off overbought readings in the early part of this week, the market appears to be setting up for another leg higher post-Jackson Hole. We will see,” Tony Sycamore, market analyst at City Index, said.
Going up
Uranium stocks took wing after Japan announced plans to restart idled nuclear power plants and develop new reactors. The move came as public opinion softened towards nuclear power as energy prices soared in the wake of Russia’s invasion of Ukraine.
Paladin Energy jumped 12.93 per cent, Bannerman Energy 17.58 per cent, Elevate Uranium 17.28 per cent and Deep Yellow 13.73 per cent.
Qantas flew up 5.62 per cent after announcing a share buyback and forecasting international flight capacity will return to normal next year. CEO Alan Joyce said leisure travel was running at 125 per cent of pre-Covid levels. Business travel was nearing full recovery at 90 per cent.
Nine Entertainment hiked its dividend by a third to seven cents per share after reporting a full-year net profit of $315 million. Shares in the media group climbed 8.5 per cent.
Asset manager Pendal jumped 7.17 per cent after agreeing to an improved takeover offer from rival Perpetual. The deal will create a global powerhouse with funds under management of more than $201 billion. Perpetual CEO and Managing Director Rod Adams will lead the combined group. Shares in Perpetual slid 10.17 per cent.
A rebound in earnings and revenue lifted student placement service IDP Education 4.29 per cent. Adjusted full-year earnings improved 127 per cent to $163 million. Revenue increased 50 per cent as international students resumed overseas study.
A 59 per cent surge in full-year net profit to $234.5 million boosted Insignia 10.73 per cent. The financial services group reported margins doubled after the acquisition of MLC.
Ports operator Qube rallied 6.46 per cent after hiking its dividend by 16.7 per cent to 7 cents per share. Full-year underlying revenue grew 26.6 per cent to $2.6 billion. Net profit improved 39.2 per cent.
Buy now pay later player Zip Co firmed 5.15 per cent as a 51 per cent increase in transaction volumes year-on-year helped investors look past a $1.1 billion full-year loss. The company said it was reducing cash burn to accelerate the path to profitability.
Record full-year earnings and cashflow helped lift South32 1.18 per cent. The diversified miner swung to a $2.669 billion profit as underlying revenue jumped 45 per cent. Underlying earnings soared 432 per cent to $2.6 billion.
Charter Hall Group climbed 5.02 per cent on record full-year earnings of $542.8 million.
Among other companies reporting, Cromwell Property gained 0.63 per cent, Costa Group 0.37 per cent, Judo Capital 6.15 per cent, Link Administration Holdings 0.23 per cent, McPherson’s 1.94 per cent, Platinum Investment 2.2 per cent, Viva Energy 1.79 per cent, Allkem 0.18 per cent, Humm 0.9 per cent, Ardent Leisure 5.36 per cent and Regis Healthcare 0.72 per cent.
Appen shed 1.68 per cent, Eagers Automotive 0.15 per cent, SkyCity Entertainment 1.69 per cent and Macquarie Telecom 0.65 per cent.
Going down
Woolworths fell 3.8 per cent after sales were dented by supply-chain disruptions, product shortages and staff shortages. Group sales declined 9.6 per cent to $60.849 billion. Earnings slipped 2.7 per cent to $2.69 billion.
Retailer City Chic Collective tumbled 20.22 per cent after a blowout in inventory hampered cashflow, and earnings fell short of the market consensus. The company aims to reduce inventory by at least a third from $195.9 million. Trading margins contracted from 62.8 per cent to 59.9 per cent.
Whitehaven Coal reversed 2.34 per cent from record levels after warning capital expenditure could double next year. The miner reported record revenue of $4.9 billion and record net profit of $2 billion for FY22.
Travel agent Flight Centre fell 5.42 per cent after reporting a full-year loss of $287.2 million.
Other markets
Trade in Hong Kong was cancelled this morning as a typhoon menaced the city. The Asia Dow gained 0.44 per cent, China’s Shanghai Composite 0.05 per cent and Japan’s Nikkei 0.51 per cent.
Oil built on a three-week high. Brent crude rose 74 US cents or 0.7 per cent to US$101.08 a barrel.
Gold rose for a third session, advancing US$7.40 or 0.4 per cent to US$1,768.90 an ounce.
The dollar climbed 0.47 per cent to 69.38 US cents.
