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ASX rises despite slide in mining and energy stocks
By Millie Muroi
Welcome to your five-minute recap of the trading day and how experts saw it.
The numbers
The Australian sharemarket advanced on Thursday despite a drop in energy and mining stocks and a flat finish on Wall Street.
The S&P/ASX 200 was up 53.9 points, or 0.7 per cent, to 7455.9 at the close, bolstered by interest-rate sensitive sectors including real estate investment trusts (REITS) and information technology companies.
The Australian sharemarket is higher at midday. Credit: Louie Douvis
The lifters
Technology stocks (up 2.2 per cent) were among the biggest large-cap advancers, with data centre operator NEXTDC (up 2.7 per cent), Xero (up 2.1 per cent) and TechnologyOne (up 1.9 per cent) all lifting.
REITS (up 3.3 per cent) was the best-performing sector as Charter Hall Group gained 5.4 per cent, Scentre climbed 4.4 per cent and Dexus added 3.2 per cent.
Beef producer Australian Agricultural Company (AACo) climbed 1 per cent after it told the market that it was looking into the implications of the indictment of British billionaire Joe Lewis, who owns a 51 per cent stake in the company. “The board has sought legal advice on the matters relating to AACo,” the company said in a statement. “AACo will inform the market as required.” Lewis has pleaded not guilty.
The laggards
Miners (down 1 per cent) were among the weakest companies on the local bourse, weighed down by iron ore heavyweights Rio Tinto (down 2.5 per cent), Fortescue (down 3.4 per cent) and BHP (down 1.5 per cent) following a 1.3 per cent decline in iron ore prices. Fortescue earlier released its quarterly production report, beating analysts’ expectations and delivering at the top end of its target for the year to June 30.
Coal miners dragged down the energy sector (down 0.5 per cent) as Whitehaven shed 5.9 per cent and Yancoal lost 1.9 per cent.
Macquarie Group declined 4.4 per cent after it reported weaker-than-expected first-quarter profits, which the company blamed on weaker trading conditions and a stronger-than-usual previous comparable period.
Embattled infant formula company Bubs Australia has lost 13 per cent of its share price value as shareholders digested the news that the current board of directors would retain their seats. At an extraordinary general meeting on Thursday, more than 62 per cent of investors who voted (about 50 per cent of all investors) chose not to spill the board, putting an end to a months-long bitter dispute about the leadership of the infant formula company.
The lowdown
eToro market analyst Josh Gilbert said a more dovish tone from the Federal Reserve overnight and a softer-than-expected inflation figure on Wednesday helped to bolster sentiment on the ASX.
“We had some positivity in interest-rate sensitive sectors such as real estate investment trusts,” he said. “The inflation print this week could see the RBA pause interest rates, with markets pricing in a 13 per cent chance of a hike.”
Gilbert said retail sales data on Friday would provide another piece to the puzzle for the RBA’s decision next week on whether to continue raising rates.
Meanwhile, Gilbert said materials and energy companies were weaker after seeing a broad decline in earnings growth after record earnings in the past year. “They’ve declined significantly with oil prices coming well off its highs,” he said.
Tweet of the day
Quote of the day
“I’ve personally spoken to you about it and asked the reasons why they were dismissed, but I really didn’t get an answer that I was comfortable with,” said Bubs Australia’s second-largest shareholder and Chemist Warehouse chief executive Jack Gance, as an attempt to spill the infant formula company’s board failed.
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With AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.