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Shares rebounded on the last big day of the full-year earnings season as gains in mining and health stocks outweighed declines in bank, oil and property companies.
The S&P/ASX 200 advanced 30 points or 0.5 per cent by mid-session following record closes in the US for the S&P 500 and Nasdaq. This morning’s rally helped the local index recoup more than half of yesterday’s 45-point loss.
What’s moving the market
A mixed morning saw miners set the pace as the heavyweight financial sector fell for a second day. There were earnings disappointments from tech darling Appen and Nine Entertainment Group, but well-received results from Woolworths and Ramsay Health Care. Afterpay’s record run continued after the company increased its full-year revenues by 97 per cent.
Resource stocks were boosted by iron ore’s first rise in five sessions and solid gains in copper and precious metals. Gold miner Newcrest climbed 2 per cent, BHP 0.8 per cent and Rio Tinto 0.7 per cent. Fortescue Metals, which reported strong earnings earlier in the week, rose 2.5 per cent to crack $19 for the first time. Woodside slid 2.2 per cent following a weak session for energy companies in the US.
The market extended its rebound as the financial sector pared initial losses. A 0.5 per cent gain in Macquarie Group helped offset declines in the big four high-street banks. CBA, NAB and ANZ eased 0.8 per cent, and Westpac 0.7 per cent.
Earnings season
Leading tech stock Afterpay swung wildly after reporting full-year earnings. The buy now pay later leader hit an all-time high of $95.97 before a mid-morning reversal and rebound left the share price 0.9 per cent ahead at $91.47.
Woolworths rose 2.3 per cent as news of a 41.8 per cent increase in online sales helped sugar the pill after full-year net profit declined 21.8 per cent to $1.165 billion and the supermarket lowered its dividend by 7.8 per cent. Bega Cheese rallied 6.7 per cent after reporting full-year earnings at the top end of guidance.
Ramsay Health Care edged up 0.9 per cent as investors looked beyond a 47.9 per cent slump in full-year statutory net profit after tax to the promise of growth as the company executes its expansion strategy. Flight Centre shareholders were also taking the long view, keeping the share price steady after the travel agent reported an $849 million full-year statutory loss before tax.
Others to deliver well-received reports this morning included insurance broker Steadfast +7.3 per cent, toll road operator Atlas Arteria +5.2 per cent, Platinum Asset Management +3.3 per cent, nickel miner Independence Group +3 per cent, automotive supplier Super Retail Group +2.9 per cent and biotech Mesoblast +1.9 per cent.
The prang of the day was tech star Appen, whose shares tumbled 10 per cent on news of an unexpected 2 per cent decline in half-year underlying earnings before tax. Nine Entertainment slid 3.1 per cent after reporting a full-year net loss of $575 million, largely due to impairments.
Also in the doghouse after reporting results: Link Administration -9.6 per cent, Clinuvel Pharmaceuticals -3.2 per cent and Cromwell Property -3 per cent.
Other markets
US index futures retreated ahead of a much-anticipated economic policy speech tonight by Federal Reserve Chair Jerome Powell. The central bank chief is expected to outline a major change in how the Fed responds to rising inflation. S&P 500 index futures were recently down eight points or 0.2 per cent.
Australia was the regional standout as declining US index futures weighed on Asian markets. China’s Shanghai Composite fell 0.2 per cent, Hong Kong’s Hang Seng 1 per cent and Japan’s Nikkei 0.5 per cent.
Oil inched higher. Brent crude rose seven cents or more than 0.1 per cent to $US45.71 a barrel. Gold added 60 cents or 0.1 per cent at $US1,953.10 an ounce.
The dollar shed early gains to trade unchanged at 72.31 US cents.
What’s hot today and what’s not:
Hot today: A week of major announcements lifted fintech 8common (ASX:8CO) to a one-year high. Shares climbed for a second day after the software builder announced a three-year deal with card solutions provider EML Payments (ASX:EML) involving Mastercard and 8common’s new CardHero platform. The company’s shares were already on a tear following news it had signed six Federal Government entities to its Expense8 travel expense management platform. 8common shares hit 15.5 cents before easing to 12 cents, a gain of 27.7 per cent.
Not today: Investors in Talisman Mining (ASX:TLM) banking on a boost from exploration results from the company’s Lucknow gold project had no luck this morning. The share price fell to a 12-week low after the miner reported low-grade mineralisation from a maiden diamond drilling program at the historic mine. The company said the project remained prospective and the results would help identify new targets. The share price fell as low as 9.5 cents before rebounding to 11 cents, a loss of 18.5 per cent.
