AGM season heats up, Tech gains as Energy falls: ASX closes flat

Market Reports

by Melissa Darmawan

The Australian sharemarket closed flat as gains from technology and real estate stocks offset declines in the energy, consumer stocks and materials sectors. At the closing bell, the S&P/ASX 200 was 0.02 per cent or 2 points higher at 7,415.

The local bourse faded in the afternoon as Asian markets started to lose ground amid Evergrande resuming trade today. The property giant’s plan to divest its property management arm fell through which saw the share price tumble more than 11 per cent so far.

The iron ore futures remained muted with Rio Tinto (ASX:RIO) leading the losses out of the mining giants, down 1.3 per cent at $96.79.

The U.S. futures also weighed on investor’s optimism as they point to a weaker start after the Dow hit a record high yesterday, while the S&P 500 is on a six day winning streak.

Across the major banks and tech giants, the performance was mixed as Westpac (ASX:WBC) gained 0.6 per cent to $25.83 while ANZ (ASX:ANZ) dipped 0.5 per cent to $28.24. Afterpay (ASX:APT) clinched onto its gains at 0.06 per cent at $126.33 while Zip Co (ASX:Z1p) closed 0.5 per cent lower.

A slew of AGM’s and trading updates took the spotlight as investors digested results amid the uncertainty due to the supply chain disruptions, volatile commodity prices and the impact of Covid-19.

Tonight, the weekly jobless claims are due on Wall St as earnings season continues. American Airlines is set to report after United Airlines closed lower. The airline said that the cost of fuel is likely to weigh on ticket prices amid the energy crunch.

Shares in Tesla will also capture some attention after they posted results after the closing bell. The EV car maker posted a beat on their revenue after they delivered 73 per cent more vehicles compared to a year ago. AT&T, Mattel, and Intel are also set to report earnings.

Local economic news

Payroll jobs lifted 0.2 per cent in the fortnight up to 25 September, down 0.6 per cent in the previous fortnight as per the Australian Bureau of Statistics.

Company news

Join me for Stocks of the Hour here where we take a look at the companies that celebrated record moves.

AMP (ASX:AMP) jumped 4.0 per cent after the investment manager posted news on a slowdown in cash outflows of $12 billion under the AMP Capital arm for the September quarter. Total assets under management remained steady at $131 billion due to improved investment market conditions. However, the wealth management arm lost $1.4 billion at the same time. There were some green shoots, their North platform attracted almost $1.0 billion in net investor capital pushing assets to $58.6 billion.

Investment manager Perpetual (ASX:PPT) catapulted 7.8 per cent. Assets under management jumped 2.7 per cent to $101 billion, helped by $100 million in net inflows. Perpetual Private Funds assets under advice surged 9.0 per cent to $18.5 billion.

Gold miner Ramelius Resources (ASX:RMS) sold 55,075 ounces of gold in the September quarter to bank $127.6 million in revenue. Cash and gold on hand rose to $273.9 million, $39.9 million higher from the June quarter. The gold miner said that they received $30.25 million for the sale of the Kathleen Valley lithium mine. 

To rival gold miner Perseus Mining's (ASX:PRU) gold output jumped 10 per cent from the prior period to 112,786 ounces of gold notching a new quarterly record. The Yaouré gold mine was the major contributor to the group’s strong results. Notional cash flow from operations was $103.5 million (US$77.8 million), 25 per cent more than the June quarter.

Aristocrat Leisure (ASX:ALL) hit a record high after successfully completing the institutional offer closing 3.3 per cent higher. Under the capital raising target of $1.3 billion, $895 million was generated at an offer price of $41.85 a share. The raising is set to fund U.K. listed gaming company Playtech which soared 56 per cent on the FTSE on Monday.

South32 (ASX:S32) added 0.3 per cent after the company maintained its financial year 2022 guidance and posted a $338 million (US$254 million) increase in net cash due thanks to higher commodity prices. Manganese production rose 7.0 per cent, maintaining production above nameplate capacity at its Worsley Alumina unit. The miner also restored production to normalised rates at Brazil Alumina this month after an incident in July that damaged a bauxite unloader.

Santos (ASX:STO) posted a 6.0 per cent jump in quarterly sales revenue of $1.52 billion (US$1.14 billion). Their free cash flow surged 33 per cent at $478 million (US$359 million). Despite the higher production, Santos’ net third quarter production of 21.9 million barrels of oil equivalent was 3.0 per cent lower than the second quarter. One of the reasons for the fall was due to a 25 per cent sell down in Bayu-Undan and Darwin LNG completed at the end of April. Shares closed 1.1 per cent lower.

Woodside Petroleum (ASX:WPL) fell 2.3 per cent after the company containted a 27 per cent cut to oil and gas 2P reserves at the Chevron-operated project in WA. The oil giant missed production expectations due to an outage at its North West Shelf and Pluto LNG projects. The company has reaffirmed calendar year 2021 guidance ahead of its merger with BHP’s (ASX:BHP) oil and gas units during the period. 

BlueScope (ASX:BSL) has boosted their earnings guidance after stronger than expected prices and demand played a role amid the challenges of the pandemic. The company now expects underlying earnings before interest and tax for the first half of financial year 2022 to be in the range of $2.1 billion to $2.3 billion. This is above the guidance range of $1.8 billion to $2.0 billion previously set and is subject to spread, FX and market conditions. 

CIMIC (ASX:CIM) jumped 5.6 per cent after posting  a 9.2 per cent annual lift to $10.9 billion in revenue with NPAT at $303 million for the nine months to 30 September this year. The surge was helped by their Australian construction and services business. The company has reiterated calendar year 2021 net profit guidance and cancelled its supply-chain finance program that was criticized as part of a balance sheet reconstruction.

Transurban’s (ASX:TCL) lost 1.3 per cent after the toll road operator posted average daily traffic measure fell 44 per cent in September, as commuters in Sydney was at home due to the lockdowns. Commuter traffic fell 12.4 per cent across the toll road operations markets around the globe as the lockdowns from Covid-19 weighed in the September quarter. Meanwhile, Brisbane activity rose 4.6 per cent. 

Healius (ASX:HLS) jumped 4.4 per cent after the diagnostic imagin and pathology operator saw a 44 per cent surge in revenue as Covid-19 testing and better than expected performance boosted the health group’s performance in the September quarter. Quarterly revenue reached $689.9 million, up from $480.2 million in the same period last year. Earnings before interest and tax for the quarter came in at $202 million, 159 per cent surge. 

Brainchip (ASX:BRN) closed 6.7 per cent higher on news that the company is now taking orders for two development kits for its artificial intelligence chips called Akida1000. A move that Brainchip describes as a “major step to full commercialisation” of its technology.

Orora (ASX:ORA) added 2.9 per cent after the packaging group revealed a $150 million on market share buyback program in an effort to return excess capital to shareholders.

Futures

The Dow Jones futures are pointing to a fall of 72 points.
The S&P 500 futures are pointing to a fall of 11 points.
The Nasdaq futures are pointing to a fall of 52 points.
The SPI futures are pointing to a rise of 2 points when the market next opens.

Best and worst performers

The best-performing sector was Real Estate Investment Trusts, up 1.7 per cent. The worst-performing sector was Energy, down 1.4 per cent.

The best-performing stock in the S&P/ASX 200 was Perpetual (ASX:PPT), closing 7.8 per cent higher at $40.38. It was followed by shares in Cimic Group (ASX:CIM) and Healius (ASX:HLS).

The worst-performing stock in the S&P/ASX 200 was Flight Centre Travel Group (ASX:FLT), closing 5.8 per cent lower at $20.39. It was followed by shares in Super Retail Group (ASX:SUL) and The A2 Milk Company (ASX:A2M).

Asian markets

Japan's Nikkei has lost 1.4 per cent.
Hong Kong's Hang Seng has lost 0.5 per cent.
China's Shanghai Composite has gained 0.3 per cent.

Commodities and the dollar

Gold is trading at US$1784.44 an ounce.
Iron ore is flat at US$124.07 a ton.
Iron ore futures are pointing to a fall of 0.2 per cent.
Light crude is trading $0.03 lower at US$83.39 a barrel.
One Australian dollar is buying 75.05 US cents.

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