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The share market hovered near a three-week high as declines in resource stocks outweighed gains in growth sectors.
The S&P/ASX 200 eased five points or 0.07 per cent by lunchtime. The Australian benchmark struggled for direction after surging 1.65 per cent yesterday to its highest level of the month.
The fourth-quarter reporting season began to heat up with well-received updates from Newcrest, Telix Pharmaceuticals and Zip Co. Lithium miners caught a lift from remarks by billionaire Elon Musk. Production and cost issues weighed on energy giants Woodside and Santos.
What’s driving the market
A consolidation session saw the Australian benchmark trade both sides of break-even without moving too far from yesterday’s close. A positive night on Wall Street kept sellers at bay while investors await the next catalyst.
The S&P 500 climbed 0.59 per cent to a second straight gain. Tech stocks outperformed, lifting the Nasdaq Composite 1.58 per cent. The Dow trailled with an advance of 0.15 per cent. All three indices closed at their highest since early June.
Australian buying interest was kept in check by a dip in US equity futures. S&P 500 futures retreated eight points or 0.2 per cent this morning.
The ASX 200 hit a five-week high yesterday, sharpening hopes the market has built a base after heavy falls through June. But questions remain over whether this month’s recovery represents a genuine turning point after a soft first-half or merely another bear market rally.
“The ASX200 yesterday edged into the bottom of a resistance band between 6750/6950 that it needs to recover above to negate the technical damage caused by the breakdown in June. Until this occurs, the rally from the 6407 low is viewed as bear market rally,” Tony Sycamore, market analyst at City Index, said.
Going up
Growth stocks outperformed for a second day, in line with overnight trends in the US. Novonix climbed 9.87 per cent, Block 5.32 per cent and BrainChip 4.42 per cent.
Biopharma Telix jumped 13.46 per cent on news sales of its prostate cancer imaging product increased more than tenfold last quarter. Global sales of Illuccix jumped to $22.5 million from $1.9 million the previous quarter as the product went on sale in the US.
A recent recovery in Zip Co continued with a rise of 4.51 per cent after the BNPL firm reported a 27 per cent increase in quarterly revenues year-on-year. Transaction numbers were 37 per cent ahead of the prior corresponding period.
Lithium miners got a boost from billionaire Elon Musk. During this morning’s Tesla earnings call, Musk said entrepreneurs should enter the lithium market.
“You can’t lose,” he said.
Lake Resources rallied 7.14 per cent, Liontown 6.95 per cent and Core Lithium 5 per cent.
Metals giant Newcrest firmed 1.05 per cent as cost reductions and on-guidance gold production offset a miss with copper. A 31 per cent increase in fourth-quarter gold production helped the miner meet its full-year target. Full-year copper production fell 3 per cent short of guidance. Cost of production declined 10 per cent during the quarter.
ANZ inched up 0.24 per cent to $21.52 after raising $1.7 billion from institutional investors to fund the purchase of Suncorp’s banking operation. Ninety-five per cent of entitlements available to shareholders were taken up. Strong demand saw the shortfall cleared at $21.65, well above the offer price of $18.90.
Elsewhere at the pointy end of the market, Coles gained 1.29 per cent, Woolworths 1.24 per cent and CSL 1.05 per cent.
Transport operator Kelsian bounced 15.44 per cent off a 21-month low after abandoning plans to acquire UK bus and rail group Go-Ahead. Kelsian said current market conditions “do not enable Kelsian to pursue a possible transaction”. The group’s share price has fallen sharply since it announced its interest in Go-Ahead.
Link Administration climbed 12.25 per cent to $4.45 after the board backed a revised takeover offer from Canadian software firm Dye & Durham at $4.81.
Going down
An increase in Woodside Energy‘s cost forecast helped pull the share price down 4.05 per cent. The energy giant raised its expected annual capital expenditure to US$4.3-$4.8 billion from previous guidance of US$3.8-$4.2 billion.
The costs outlook took some of the shine off major increases in production and revenue after the firm absorbed BHP’s petroleum assets. Production jumped 60 per cent and revenue 44 per cent.
Santos eased 1.22 per cent after reporting a slight dip in second-quarter production due to a field decline and planned maintenance outages. First-half revenues were a record US$3.8 billion, an increase of 85 per cent.
Bulk metal majors BHP, Rio Tinto and Fortescue Metals retreated with the ore price after China set up a centralised body to negotiate prices. Ore on the Dalian Commodity Exchange faded 1.5 per cent this morning.
Rio Tinto dropped 2.89 per cent, Fortescue Metals 3.13 per cent and BHP 1.48 per cent.
Other markets
Asian markets retreated. The Asia Dow fell 0.59 per cent, China’s Shanghai Composite 0.4 per cent, Hong Kong’s Hang Seng 1.17 per cent and Japan’s Nikkei 0.05 per cent.
Oil declined for a second day following mixed US inventory data. Brent crude dropped 71 US cents or 0.66 per cent to US$106.21 a barrel.
Gold fell below last night’s 15-month low. The yellow metal was lately down US$9.90 or 0.6 per cent to US$1,690.30 an ounce.
The dollar firmed 0.12 per cent to 68.92 US cents.
