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A huge morning of full-year earnings delivered plenty of price swings but little movement in the overall index.

The S&P/ASX 200 traded in and out of positive territory before reaching mid-session seven points or 0.1 per cent ahead. The index hit a mid-morning high following an unexpectedly large drop in the unemployment rate.

Today’s clash of the market titans produced winners in ANZ, CSL, Rio Tinto and Fortescue Metals following well-received profit updates. Woodside Petroleum and Wesfarmers were given the cold shoulder by disappointed investors.

What’s driving the market

Gains in health, technology, materials and financials outweighed declines in industrials, energy and most bond proxies. Companies reporting earnings accounted for most of the major moves at the top end of the market. The healthcare sector hit its highest level of the year following reports from CSL and Sonic.

The index temporarily extended slender early gains on news of a sharp decline in unemployment. The jobless rate fell to 6.4 per cent last month from 6.6 per cent in December as labour markets continued to heal. Employment increased by a seasonally-adjusted 29,000.

“January 2021 was the fourth consecutive monthly rise in employment, as employment in Victoria continued to recover,” Bjorn Jarvis, head of labour statistics at the ABS, said. “Nationally, employment was only 59,000 people lower than March 2020, having fallen by 872,000 people early in the pandemic.”

Soft leads from Wall Street helped pull the market lower. Overnight, the S&P 500 extended a run of lacklustre sessions with a narrow loss of 0.03 per cent. The Dow gained 0.29 per cent. The Nasdaq fell 0.58 per cent.

Going up

ANZ soared 3.1 per cent to its highest level in almost a year as unaudited cash profits bounced 54 per cent to $1.81 billion last quarter. CEO Shayne Elliott said the bank had seen market share gains in Australian home loans and record home loan volumes in New Zealand. Westpac climbed 3.1 per cent. NAB faded 0.9 per cent and  CBA 1.4 per cent.

A 44 per cent surge in reported half-year net profit to $1.8 billion drove CSL shares up 2.4 per cent. The biotech raised its interim dividend by 9 per cent to US$1.04 a share.

Sonic Healthcare dipped less than 0.1 per cent as the pathology business roared back from its pandemic slump. Net profit surged 166 per cent to $678 million.  

Surging iron ore prices underpinned a 66 per cent increase in first-half net profit at Fortescue Metals. The share price jumped 2.6 per cent as investors cheered a record dividend of $1.47 per share.

Rio Tinto was last up 1 per cent after hitting a record in early trade. The ore miner yesterday reported a 13 per cent increase in underlying half-year earnings and a 21 per cent increase in earnings per share.   

Record sales and production helped Santos inch up 0.1 per cent despite the profit impact of weak oil and LNG prices. The energy giant reported a full-year net loss of $357 million.

Casino stocks shrugged off confirmation of the profit hit from pandemic lockdowns and bans on international flights. Crown Resorts climbed 0.7 per cent despite a half-year loss of $17.9 million. Star Entertainment traded unchanged following a 33.1 per cent slump in half-year statutory net profit to $51.2 million.

Among other companies reporting, IPH soared 8.3 per cent, Iress 6.3 per cent, Orora 4.4 per cent and Oz Minerals 1.9 per cent.  

Beyond from the earnings deluge, Afterpay bounced 2.7 per cent and Brambles added 0.2 per cent. Treasury Wine Estates soared 12.4 per cent following yesterday’s profit update. Seven West Media gained 5.6 per cent.

Going down

Retail and industrial conglomerate Wesfarmers declined 0.7 per cent as investors weighed a 25.5 per cent surge in net profit to $1.4 billion and a decision to press ahead with a lithium mine in WA. The result was driven by strong sales across the firm’s retail businesses, which include Bunnings, Kmart and Officeworks.

A US$4 billion full-year net loss sent Woodside Petroleum down 3.2 per cent. The headline loss was partly offset by record production. The result was clouded by impairments. Underlying profit was US$447 million.

A dividend increase helped cushion South32 from a dive in half-year profit. The miner lifted its interim dividend to 1.4 cents from 1.1 cents despite a 46 per cent decline in after-tax profit to $53 million. Shares traded unchanged.

Diversified industrial and media operator Seven Group sank 1.8 per cent after reporting a 3 per cent drop in underlying first-half net profit to $247 million. The company increased its final dividend by 10 per cent to 23 cents per share.

Weak commodity prices clouded Origin Energy‘s half-year result. Statutory profit shrank to $13 million from $599 million over the first half of FY20. The company cut its dividend from 15 cents last time to 12.4 cents per share. The share price retreated 1.9 per cent.

Other companies reporting: NRW Holdings dived 15.9 per cent, Perpetual 6.4 per cent and United Malt 4.6 per cent. Coles, which reported earlier this week, slumped 4.5 per cent.

Other markets

Chinese shares led gains in Asia as trade resumed after the week-long Lunar New Year holiday. The Shanghai Composite jumped 1.81 per cent. Hong Kong’s Hang Seng added 0.32 per cent and Japan’s Nikkei 0.23 per cent.

US futures advanced ahead of tonight’s weekly jobless claims report. S&P 500 futures rose five points or more than 0.1 per cent.

The rally in oil showed no sign of flagging, boosted by extreme cold and strong demand in the US. Brent crude climbed 92 cents or 1.4 per cent to $US65.26 a barrel. Gold rebounded $4.70 or 0.3 per cent to $US1,777.50 an ounce.

The dollar edged up 0.04 per cent to 77.6 US cents.

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