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The share market faded towards its first weekly loss this month as bank and resource stocks surrendered initial gains and health stocks declined for a second day.
The S&P/ASX 200 eased 14 points or 0.2 per cent by mid-session, extending yesterday’s 48-point tumble and pushing the index 20 points or 0.3 per cent into the red for the week.
The index rose as much as 46 points before the rot set in. The market rolled over as the big four banks and mining giants BHP and Rio Tinto turned negative, shedding between 0.2 and 0.8 per cent.
Suncorp shines
Despite this morning’s setback, the market had until the last two sessions ground steadily higher during three weeks of company earnings. Suncorp was today’s standout, climbing 8.8 per cent to its highest level in almost two months despite a 32.8 per cent decline in full-year cash earnings to $749 million after a year of extreme weather conditions and a global pandemic.
The board declared a final dividend of 10 cents per share, a substantial drop from last year’s 44 cent payout. CEO Steve Johnston called on state and federal governments to work on structural reform to mitigate the impact of natural disasters.
“Now is the time for governments at all levels to work with businesses, big and small, and to invest in a nation-building program encompassing infrastructure, incentives, improved building standards and the removal of inefficient taxes and charges,” he said. “This will not only reduce the impact of natural disasters on our communities; it will provide much-needed economic stimulus at a time when it is desperately needed, particularly in regional communities.”
Other earnings
The health sector fell for a second day following mixed results from Mayne Pharma and Healius.
Shares in Mayne declined 3.6 per cent after the company reported a full-year net loss of $92.8 million. The result was impacted by increased competition in generic drugs and the impact of COVID-19.
Healius edged up 0.2 per cent to its highest level in two years as COVID-19 tests partly compensated for declines in patient numbers for its pathology and imaging businesses.
Among other companies reporting, online marketplace Redbubble rose 5.5 per cent to a record, skincare wholesaler BWX 2.3 per cent and poultry producer Inghams 4 per cent. Insurer MyState dropped 4.2 per cent (more below).
Moving the market
The index hit its highest point early in the session following a positive night on Wall Street. The Nasdaq set the pace with a rise of 118 points or 1.06 per cent to its 35th record close this year. The S&P 500 edged up a modest 11 points or 0.32 per cent. The Nasdaq’s run helped lift our tech sector as Nearmap rallied 7 per cent, Xero 1.8 per cent and Appen 1.4 per cent.
Recovery plays had a strong morning after Victoria declared just 179 new coronavirus cases, the lowest tally in weeks. Webjet surged 7.8 per cent, Star Entertainment 7.5 per cent, Flight Centre 5.1 per cent and Southern Cross Media 3.1 per cent.
Energy stocks and REITS were among the best performers. Unibail-Rodamco-Westfield put on 3.8 per cent, Charter Hall Group 3.2 per cent, Scentre Group 2.3 per cent, Santos 2.1 per cent and Woodside Petroleum 0.5 per cent.
Other markets
Asian markets followed Wall Street higher. China’s Shanghai Composite put on 0.5 per cent, Hong Kong’s Hang Seng 0.7 per cent and Japan’s Nikkei 0.3 per cent. S&P 500 index futures rallied five points or 0.2 per cent.
Oil recouped around a third of its overnight loss. Brent crude bounced 17 cents or 0.4 per cent to $US45.07 a barrel after shedding 47 cents last night. Gold bounced $7.50 or 0.4 per cent to $US1,954 an ounce.
The dollar was lately up 0.07 per cent at 71.96 US cents.
What’s hot today and what’s not:
Hot today: Shares in junior explorer Rafaella Resources (ASX:RFR) briefly tripled in value on news the company will acquire two nickel-copper sulphide projects in Canada. The Midrim and Laforce projects are located near Chase Mining’s (ASX:CML) Alotta project in Quebec. The company will pay for the acquisition by issuing 13,050,000 shares to the present owner, a subsidiary of Meteoric Resources (ASX:MEI). Rafaella’s previously-dormant share price ran from 6.6 cents to 21.5 cents before falling back to 12.5 cents, a gain of 89.4 per cent.
Not today: Tasmanian banking group MyState (ASX:MYS) sank 4.2 per cent after scrapping its final dividend to preserve capital. While the group declared a net profit of $30.1 million, Managing Director and CEO Melos Sulicich warned COVID-19 was “uncharted territory in terms of credit and liquidity challenges”.
