ASX bounces back as miners hit record highs: ASX closed 0.5% higher

Market Reports

by Melissa Darmawan

Aussie stocks pushed the local bourse higher by 38 points or 0.5 per cent at 7,417 as it nearly bounced back from yesterday’s breather as investors sent funds back into mining stocks.

The moves followed a mixed closed on Wall St after the Fed kept rates unchanged with the taper debate still in the air. The tech-heavy Nasdaq was the only index which advanced on the backdrop of tech titans' earnings results.

Technology outperformed the sectors adding 2.6 per cent followed by Materials, up 1.5 per cent thanks to the mining giants. Defensives retreated following lead from Wall St with Property down 1.3 per cent followed by Utilities and Consumer Staples. All other sectors advanced.

Iron ore miners took the spotlight today as each hit record highs setting the mood for reporting season, which is set to go into full throttle next week.

Rio Tinto (ASX:RIO) added 1.5 per cent after posting a 262 per cent boost in their dividend after a stellar half-year, thanks to strong commodity prices. BHP (ASX:BHP) rose 1.7 per cent riding on the coat tails of Rio, while Fortescue Mining (ASX:FMG) closed 1.9 per cent higher after the single commodity producer smashed record shipments for the June quarter posting an upgraded production guidance.

The winning Tech sector got helped by buy-now-pay-later stocks taking a leap. Zip Co (ASX:Z1P) added 5.8 per cent while rival-peer Afterpay (ASX:APT) rose 3 per cent.

Iress (ASX:IRE) within that space surged 13.9 per cent after the platform provider knocked back an unsolicited takeover bid from private equity firm, EQT after multiple offers. They also flagged a share buy-back of up to $100 million to start in August after their half-year results.

Financials gained the least out of the 11 sectors, up 0.1 per cent. Commonwealth Bank (ASX:CBA) added the most up 0.2 per cent while ANZ (ASX:ANZ) eked up 0.04 per cent. National Australia Bank (ASX:NAB) fell 0.5 per cent lower compared to Westpac (ASX:WBC), it dipped 0.2 per cent. Macquarie Group (ASX:MQG), the next largest bank outside the major four fell 0.5 per cent  as they cut back on their dividend payout.

Tonight, investors look to Wall St as their second quarter reporting season continues along with weekly jobless claims and GDP figures.

Big tech names like Facebook, Apple, Microsoft and Alphabet posted strong earnings results though investors reacted in a mixed fashion as concerns on the economic rebound with the Delta variant linger, the job market and inflation stay front of mind.

Facebook already gave caution that revenue is set to "decelerate significantly" which saw their share price tumble after market close and could be a sign of volatility ahead for this social media giant and the Communication Services sector.

On the cards for reporting season, big names such as Amazon, Samsung, Pinterest, KFC and Pizza Hut owner Yum Brands and Mastercard are set to release results with Robinhood pencilled in to make its official debut on the Nasdaq.

Local economic news

Australian Bureau of Statistics have released figures measuring changes in prices of imports of merchandise landed in Australia and exports of merchandise shipped from Australia.

Export price index rose 13.2 per cent this quarter and 26.0 per cent through the year while the import price index rose 1.9 per cent this quarter and fell 2.5 per cent through the year.

The exchange rate had a small upward impact on export prices and small downward impact on import prices this quarter.

Company news

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The world’s fourth largest iron ore producer, Fortescue Metals (ASX:FMG) smashed record shipments for the June quarter exceeding their benchmark, defying weather troubles banking US$6.9 billion.

Millionaires’ factory Macquarie Group (ASX:MQG) is looking to pour capital back into the business as they cut back on dividend payouts to “support business growth”. The $58 billion bank flagged to investors that they would taper back its dividend payout range from 50 to 70 per cent, down from their usual dividend policy of 60 to 80 per cent.

Trading platform provider Iress (ASX:IRE) knocked back an unsolicited takeover bid from private equity firm, EQT as they present to investors their plans to expand in the marketplace.  

Futures

The Dow Jones futures are pointing to a rise of 44 points.
The S&P 500 futures are pointing to a fall of 1 points.
The Nasdaq futures are pointing to a fall of 28 points.
The SPI futures are pointing to a rise of 40 points when the market next opens.

Best and worst performers

The best-performing sector was Information Technology, up 2.6 per cent. The worst-performing sector was Real Estate Investment Trusts, down 1.3 per cent.

The best-performing stock in the S&P/ASX 200 was IRESS (ASX:IRE), closing 13.9 per cent higher at $14.25. It was followed by shares in PolyNovo (ASX:PNV) and Zip Co (ASX:Z1P).

The worst-performing stock in the S&P/ASX 200 was Redbubble (ASX:RBL), closing 3.4 per cent lower at $3.65. It was followed by shares in Stockland (ASX:SGP) and BWP Trust (ASX:BWP).

Asian markets

Japan's Nikkei has gained 0.7 per cent.
Hong Kong's Hang Seng has gained 2.8 per cent.
China's Shanghai Composite has gained 1.4 per cent.

Commodities and the dollar

Gold is trading at US$1817.55 an ounce.
Iron ore is 0.1 per cent higher at US$202.68 a ton.
Iron ore futures are pointing to a fall of 2.4 per cent.
Light crude is trading $0.34 higher at US$72.73 a barrel.
One Australian dollar is buying 73.89 US cents.

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