Evolution Mining soars on $1b deal, Atlas Arteria's rating gets upgraded: ASX up 0.3% at noon

The Australian sharemarket tripped over the SPI’s flat start falling 0.3 per cent in the first 20 minutes of trade. Banks continued their losing streak after yesterday's trading update by Commonwealth Bank (ASX:CBA) missing expectations amid several brokers downgrading the bank’s target price.

Momentum grew an hour in as the local bourse recovered with Evolution Mining (ASX:EVN) leading the way as the best performer, surging over 8.0 per cent after unveiling plans to acquire Ernest Henry operation after market close for $1 billion.

Energy is dragging the index as the worst performer after the price of oil dipped overnight amid the Biden administration tapping on China’s shoulder to consider releasing oil reserves in a joint sale. Consumer discretionary, utilities and financials are lower in the range of 0.5 per cent and 0.2 per cent.

In the winners corner, consumer staples are being lifted by Treasury Wine Estate (ASX:TWE). The wine maker is set to buy Family Frank Vineyards, based in the Napa Valley in northern California with a price tag of $434 million. Healthcare and consumer staples followed suit with the rest of the sectors advancing.

Aristocrat & Bluescope falls as Sonic Healthcare grows

Profit taking appears to take place across Aristocrat (ASX:ALL), Bluescope Steel (ASX:BSL), while Sonic Healthcare (ASX:SHL) is bucking the trend.

Online gaming giant Aristocrat Leisure (ASX:ALL) is feeling the pain after last year’s profit figures were inflated due to a $1 billion tax benefit. This meant this year's net profit after tax fell 40 per cent to $820 million from this time last year. On an underlying basis, the poker machine giant saw figures close to pre-pandemic levels with the group’s profit growing 81 per cent to $865 attributed to the growth in mobile games and its North American gaming operations. Shares are trading 4.5 per cent lower at $45.21 as the worst performer of the session.

At BlueScope’s (ASX:BSL) AGM, the steel maker reiterated its earnings guidance to be in the range of $2.1 billion to $2.3 billion, subject to spread, FX, and market conditions, the same guidance provided in October. The company said that global steel prices and demand across key geographies have been strong, with favourable conditions in building and construction end use segments. Shares are trading 1.2 per cent lower at $20.40.

Meanwhile, investors are enjoying Sonic Healthcare’s (ASX:SHL) trading update for the four months to October this year. Revenue grew 5 per cent to $3.1 billion while earnings before interest, tax, depreciation and amortisation is 16 per cent higher at $991 million, compared to the same time last year. Shares are trading 3.2 per cent higher at $39.82.

At noon, the S&P/ASX 200 is 0.3 per cent or 21.50 points higher at 7,391. The SPI futures are pointing to a rise of 22 points.

Broker moves

Macquarie upgraded Atlas Arteria's (ASX:ALX) rating to an outperform from a neutral with a price target of $6.87. The broker notes the company is trading slightly below fair value, and that the annual percentage rate concession plus likely improved certainty towards Greenway should combine with the dividend to raise its attractiveness. Target price rises 35c to $6.87 to reflect improved cash flow and a 30 basis point cut in bond forecasts. Shares in Atlas Arteria (ASX:ALX) are trading 2.6 per cent higher at $6.72.

Best and worst performers

The best-performing sector is consumer staples is up 1.4 per cent while the worst-performing sector is energy, down 0.8 per cent.

The best-performing stock in the S&P/ASX 200 is Evolution Mining (ASX:EVN) trading 8.2 per cent higher at $4.34. It is followed by shares in Sonic Healthcare (ASX:SHL) and Virgin Money UK (ASX:VUK).

The worst-performing stock in the S&P/ASX 200 is Aristocrat Leisure (ASX:ALL) trading 4.5 per cent lower at $45.21. It is followed by shares in Mineral Resources (ASX:MIN) and Champion Iron (ASX:CIA).

Commodities and the dollar

Gold is trading at US$1870.00 an ounce.
Iron ore is 0.5 per cent lower at US$89.95 a ton.
Iron ore futures are pointing to a fall of 1.4 per cent.
One Australian dollar is buying 72.68 US cents.