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The share market reversed two days of gains, turning negative for the week after once again struggling to break through stubborn technical resistance.
The S&P/ASX 200 fell 60 points or 1 per cent to 6101 by mid-session as the dollar rose back above 72 US cents and utilities, banks and miners led a reversal.
The index first approached the 6200 level in June, then again a month later and three times already this month. Each time the rally has been repelled just short of 6200, peaking yesterday at 6199.2.
What’s moving the market
The utilities sector slid 3.4 per cent as energy provider AGL traded without its dividend and gas and energy infrastructure operator APA Group warned it expects earnings may deteriorate this year.
AGL dropped 3.5 per cent or 56 cents as it paid shareholders a 51 cent final dividend. Telstra and Suncorp also traded without their dividends.
APA Group eased 5 per cent on news the company expects earnings before interest and tax to be in the range of $1,625 – $1,665 million this year. The company reported a 10.1 per cent increase in net full-year after-tax profit to $317.1 million on earnings of $1,653.9 million.
Yesterday’s stellar session for the big four banks was a memory as NAB shed 2.1 per cent, ANZ 1.9 per cent, Westpac 1.8 per cent and CBA 1.8 per cent.
A fourth straight decline in iron ore helped drag Rio Tinto down 1.3 per cent and BHP 0.9 per cent. Fortescue Metals bucked the trend with a rise of 1 per cent a day after hitting a new peak.
Defensive sectors fared best. Consumer staples gained 0.2 per cent as supermarket Coles edged up 1.1 per cent, Treasury Wine Estates 1 per cent and Metcash 2.7 per cent.
The dollar hit 72.08 US cents before trimming its rise to 0.06 per cent at 71.98 US cents.
Earnings season
Waste manager Cleanaway and mining services provider Worley were the pick of the major companies reporting earnings. A record final dividend announcement helped lift Cleanaway 8.3 per cent to its highest level in a year.
Worley climbed 8.4 per cent as the integration of ECR produced cost synergies that contributed to a 46 per cent lift in statutory full-year net profit after tax to $252 million. Building materials provider Adbri edged up 2.5 per cent and media group Seven Group 1.2 per cent.
Whitehaven Coal tumbled 12.5 per cent after unveiling a 95 per cent plunge in full-year underlying net profit after tax to $30 million as coal prices shrank. Ridley Corporation shed 1.4 per cent
Other markets
A subdued morning on Asian markets saw China’s Shanghai Composite dip less than 0.1 per cent, Hong Kong’s Hang Seng edge up 0.1 per cent and Japan’s Nikkei ease 0.3 per cent.
S&P 500 index futures were flat following a mixed session for the major indices overnight. The S&P 500 and Nasdaq edged up 0.36 per cent and 0.76 per cent, respectively, to record closes, but the Dow shed 0.21 per cent as traders sold companies scheduled to be ejected from the blue-chip average.
Oil extended overnight gains as tropical storms in the Gulf of Mexico forced production stoppages. Brent crude gained 13 cents or 0.3 per cent at $US45.99 a barrel. Gold bounced $13.30 or 0.7 per cent to $US1,936.40 an ounce.
What’s hot today and what’s not:
Hot today: Buy now, pay later provider Z1P Co (ASX:Z1P) joined Afterpay at all-time highs after announcing a partnership with eBay Australia. The deal marks the launch of Z1P Business, a platform that allows the small business community to purchase inventory and manage cashflow using Z1P’s lines of credit. The agreement opens the platform to eBay Australia’s 40,000 small and medium-sized businesses. Z1P’s share price surged 26 per cent this morning.
Not today: A flat outlook for this financial year sent software-as-a-service provider Bravura Solutions (ASX:BVS) to its lowest level since April. Investors looking for growth bailed after the company warned it was “possible that FY21 NPAT [net profit after tax] will be similar to FY20” because of the uncertainty of closing deals due to the impact of Covid-19. The downbeat outlook took the shine off a full-year report showing a 22 per net increase in net profit and a 6 per cent increase in revenue. The share price slumped 14.1 per cent.
