Tech bulls lead again on fall in bond yields, Why Bega Cheese is a buy: ASX closes 0.2% higher

Market Reports

by Melissa Darmawan

The Australian sharemarket continued to climb for its second straight day dancing 0.8 per cent higher at 7,382 in early session - its best performance in three weeks to close 0.2 per cent or 14.5 points higher at 7,341 led by the Technology bulls.

Zip Co (ASX:Z1P) soared 13.7 per cent at $8.78 leading the pack in the buy-now pay-later space, taking home first as the best performer of the session.

Elsewhere in the tech space, Afterpay (ASX:APT) enjoyed its gains, up 3 per cent at $3.64 while Sezzle (ASX:SZL) jumped 6.3 per cent at $0.58. Embattled Nuix (ASX:NXL) seems to be on a U turn after recent weeks of investigation, up 9.5 per cent at $2.66 as the second best performer of the day.

Laybuy (ASX:LBY) climbed 5.5 per cent intra day to close 2.7 per cent higher at $0.56 cents on news of record results for their first quarter. The $140 million split-payment provider expanded in all regions with the UK as their leader. They recorded a gross merchandise value to a record of $172 million (NZ$184 million) or annual of $691 million (NZ$738 million), up 58 per cent compared to this time last year.

Utilities, Energy and Healthcare dragged on the index closing 0.5 per cent, 0.4 per cent and 0.3 per cent lower, respectively.

Big name biotech CSL (ASX:CSL) fell 0.7 per cent at $279.14 while on the banking front, the four major banks closed in the red with Westpac (ASX:WBC), the bank that shed the least, down 0.3 per cent at $25.53.

Mining giants closed in the black with BHP (ASX:BHP) added 1.7 per cent while Rio Tinto (ASX:RIO) edged 0.1 per cent higher.

Sydney Airport (ASX:SYD) flew 2.9 per cent higher at $7.83 as investors continue to mull on the takeover bid by a consortium of infrastructure investors.

Meanwhile, Flight Centre (ASX:FLT) rose 0.6 per cent and Webjet (ASX:WEB) gained 0.2 per cent while Qantas (ASX:QAN) fell 0.6 per cent on news that NSW reported 38 new coronavirus cases, the highest number of local cases recorded in a day in more than 14 months.

As for the Kerry Stokes Seven Group Holding (ASX:SVW) takeover bid with Boral (ASX:BLD), the building and materials company closed 0.2 per cent lower at $7.39 as Seven Group’s interest crept over 41 per cent early this afternoon with the takeover bid set to close on the 15 July. Seven West Holdings (ASX:SWM) closed 1.2 per cent lower at $0.405 after trading as high as 4.8 per cent intra-day.

Local economic news

RBA Governor Philip Lowe made an online speech at the Economic Society of Australia. Transcript available here.

Company news

Wealth platform provider Netwealth (ASX:NWL) released June quarter results with figures showing a 12 per cent rise in funds under management (FUA) and a 102 per cent boost in inflows.

Worley (ASX:WOR) has signed a deal with Red Sea National Refining and Petrochemicals Company for a greenfield integrated refinery and petrochemicals complex in Egypt.

Wealth services provider AMP (ASX:AMP) is set to sell its $60 billion global listed equities and global income fund to millionaire factory Macquarie Group (ASX:MQG) for up to $185 million.

Broker moves

Morgans rates Bega Cheese (ASX:BGA) as a buy with a price target of $6.35. The broker notes competition is heating up as opening farmgate milk prices for the new season are at record high levels and processors are pretty much overpaying for milk. Margins would fall should global dairy prices fall materially or the Australian dollar rise, explains the broker. The analyst feels the share price weakness more than reflects the extent of Morgans' earnings EBITDA downgrade of -6.7 per cent for FY22. The target price falls to $6.35 from $6.80. Shares in Bega Cheese (ASX:BGA) closed 1.1 per cent higher at $5.40.

Futures

The Dow Jones futures are pointing to a fall of 106 points.
The S&P 500 futures are pointing to a fall of 10 points.
The Nasdaq futures are pointing to a fall of 14 points.
The SPI futures are pointing to a rise of 11 points when the market next opens.

Best and worst performers

The best-performing sector was Information Technology, up 1.3 per cent. The worst-performing sector was Utilities, down 0.5 per cent.

The best-performing stock in the S&P/ASX 200 was Zip Co (ASX:Z1P) closing 13.7 per cent higher at $8.78 followed by shares in Nuix (ASX:NXL) and Nearmap (ASX:NEA).

The worst-performing stock in the S&P/ASX 200 was Magellan Financial Group (ASX:MFG) closing 3.9 per cent lower at $51.73 followed by shares in Perseus Mining (ASX:PRU) and Chalice Mining (ASX:CHN).

Asian markets

Japan's Nikkei has lost 0.9 per cent.
Hong Kong's Hang Seng has lost 2.4 per cent.
China's Shanghai Composite has lost 0.7 per cent.

Commodities and the dollar

Gold is trading at US$1798.02 an ounce.
Iron ore is flat at US$222.39 a ton.
Iron ore futures are pointing to a fall of 2.90 per cent.
Light crude is trading $0.35 lower at US$71.15 a barrel.
One Australian dollar is buying 74.52 US cents

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