ASX hits new highs for 2nd day amid Covid blues: Aus shares closed 0.1% higher

Market Reports

by Melissa Darmawan

After a cautious start for the Australian sharemarket, the local bourse continued to ascend to post another record high for its second straight day to close 0.1 per cent or 8 points higher at 7,511.

A slide in Materials pressured lower by iron ore prices notched the day as the worst performer, down 1.3 per cent. Energy wasn’t any better falling in tandem with crude oil prices just a nip behind falling 1.2 per cent. Utilities dropped 0.3 per cent while Industrials just edged lower at 0.1 per cent.

Gains by Property, companies that rely on direct consumer spending and Financials helped keep the losses in check with Technology and Communication Services adding the least by 0.3 and 0.1 per cent respectively.

Mining stocks closed in the red with Fortescue Metals (ASX:FMG) falling 3.4 per cent on news a contractor tested positive to Covid-19 followed by BHP (ASX:BHP) and Rio Tinto (ASX:RIO) down 1.7 per cent following lead from London trade. The iron ore futures are pointing to a 4.7 per cent fall.

After the monster splurge announcement from U.S. payment giant Square to buy out Afterpay (ASX:APT) for $39 billion, buy-now-pay-later stocks are in the red for its second day as investors mull on the details of the offer. Afterpay is down 1.1 per cent after gaining over 18 per cent by Tuesday while Zip Co (ASX:Z1P) fell 2.1 per cent.

Reporting season is underway with furniture retailer Nick Scali (ASX:NCK) and Centuria Industrial REIT (ASX:CIP) posting impressive headline figures providing investors a glimpse of what is set to come after Rio Tinto (ASX:RIO) set the mood with their  262 per cent boost in their dividend last week. One thing to keep in mind is profit guidance and so far, it has been mixed with some companies holding back due to the unpredictability of Covid-19 as well as the supply chain bottleneck remaining front of mind. Nick Scali (ASX:NCK) closed 0.1 per cent lower while Centuria Industrial REIT (ASX:CIP) added 0.3 per cent.

Pantera Minerals (ASX:PFE) officially arrived on the ASX today rising over 100 per cent after a capital raise of $7 million, issuing shares at $0.20.

Tonight, we have a bit of news lined up overseas with the Bank of England expected to keep its benchmark interest rate and its bond-buying program unchanged during its August meeting. Though they might move a step closer to tightening monetary policy.

On Wall St, second quarter earnings results will continue while weekly figures on unemployment benefit claims along with the international trade balance and Challenger job cuts report are slated. Job cuts were at its minimum in 21 years with 20,476 planned job losses. The U.S. trade deficit could see a rise from US$71.2 billion to US$71.5 billion in June.

Local economic news

Payroll jobs decreased by 2.4 per cent between the weeks ending 3 and 17 July 2021 while the June trade balance was in surplus of $10.5 billion with exports, up 4 per cent while imports added 1 per cent as per the Bureau of Statistics.

Company news

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Furniture retailer Nick Scali (ASX:NCK) posted bullish numbers for the 2021 financial year with their net profit after tax, up 100 per cent along with a 42.1 per cent uptick in revenue, compared to the year before beating analyst’s expectations of $79.2 million, as consumers decorate their homes while cooped up inside due to the Covid-19 pandemic.

Centuria Industrial REIT’s profit (ASX:CIP) catapulted by 712 per cent for the 2021 financial year, thanks to a string of successful acquisitions, a strong valuation uplift and the eCommerce boom from the Covid-19 pandemic.

Gold player Resolute Mining (ASX:RSG) has finally landed a deal to offload its Bibiani gold mine in Ghana for $122 million (US$90mil) to U.S listed company, Asante Gold. The deal was struck after their first attempt to divest the mine for $142 million (US$105m) in December 2020 to China’s Chifeng Jilong Gold Mining Co which grinded to a halt in April this year. The Chinese miner said it didn’t receive timely information from Resolute Mining about the termination of the mining lease.

Futures

The Dow Jones futures are pointing to a rise of 41 points.
The S&P 500 futures are pointing to a rise of 5 points.
The Nasdaq futures are pointing to a rise of 7 points.
The SPI futures are pointing to a rise of 6 points when the market next opens.

Best and worst performers

The best-performing sector was Real Estate Investment Trusts, up 1.1 per cent. The worst-performing sector was Materials, down 1.3 per cent.

The best-performing stock in the S&P/ASX 200 was NIB Holdings (ASX:NHF), closing 3.1 per cent higher at $7.43. It was followed by shares in Nuix (ASX:NXL) and James Hardie Industries (ASX:JHX).

The worst-performing stock in the S&P/ASX 200 was Nickel Mines (ASX:NIC), closing 3.5 per cent lower at $1.09. It was followed by shares in Fortescue Metals Group (ASX:FMG) and Champion
Iron (ASX:CIA).

Asian markets

Japan's Nikkei has gained 0.5 per cent.
Hong Kong's Hang Seng has lost 0.5 per cent.
China's Shanghai Composite has lost 0.4 per cent.

Commodities and the dollar

Gold is trading at US$1810.38 an ounce.
Iron ore is 0.5 per cent lower at US$183.69 a ton.
Iron ore futures are pointing to a fall of 4.7 per cent.
Light crude is trading $0.05 higher at US$68.20 a barrel.
One Australian dollar is buying 73.95 US cents.

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