Wall St gains, Oil Search's revenue jumps 12%, Flight Centre's price target lifts: ASX to rise


Global major indexes closed mixed on caution trading ahead of the big tech names slated to report. Evergrande commenced real estate development soothing market concerns. The local bourse rode the commodity wave as energy & miners powered up.

The Aussie sharemarket is set to rise with the SPI futures pointing to a gain of 0.2 per cent.

S&P 500, Dow hit record highs

Wall St closed in the black with the S&P 500 and the Dow hitting record highs. Investors focused on corporate earnings with eyes on tech stocks, as they make up 30 per cent of the S&P 500. Inflation concerns have eased for now, as market participants are waiting to see if inflation abates or persists before it gets priced in.

The impact from supply chain disruptions could be more pronounced by the end of this week, after we hear how investors respond to Facebook, Alphabet, Amazon, and Apple’s quarterly earnings.

Ad sales are on watch after Snap’s results last week. The social giant warned that businesses are holding back from online ads on concerns that they can’t meet demand on time due to the supply chain issues, ahead of holiday season.

Tesla shares surged 12.6 per cent to a new record high after car rental provider Hertz placed an order for 100,000 cars. Adding to the momentum, EV carmaker achieved a milestone hitting US$1 trillion valuation amid a broker upgrade from Morgan Stanley. The target price got a boost to US$1,200 from US$900. Hertz’s shares jumped 10 per cent on the news.

PayPal rose 2.7 per cent after cancelling out the rumours to buy Pinterest. The rumour valued the deal at US$45 billion. Shares in Pinterest dived 12.7 per cent on the news.

Meanwhile, Kimberley-Clark fell 2.2 per cent on supply chain concerns after downgrading its profit outlook due to increased costs.

We are seeing U.S. stocks rally on optimism around earnings season, though caution is still in the air. The fourth quarter outlook could be more on the dim side of things as companies present a cautious profit outlook amid supply chain disruptions.

Wall St gains as bond yields dip

At the closing bell, the Dow Jones added 0.2 per cent to 35,741, the S&P 500 gained 0.5 per cent to 4,566 while the Nasdaq closed 0.9 per cent higher at 15,227.

The yield on the 10-year treasury note dipped by two basis points to 1.64 per cent, gold shines on a weaker greenback.

Across the S&P 500 sectors, there were only two outliers while the rest advanced. Consumer discretionary fared the best, up 2.1 per cent followed by energy at 1.4 per cent then materials. Utilities and financials closed lower.

European markets mixed on HSBC lift

Across the Atlantic, European markets closed mixed. Paris lost 0.3 per cent, Frankfurt gained 0.4 per cent and London’s FTSE added 0.3 per cent lifted by HSBC. The bank posted a 74 per cent surge in profit and announced a US$2 billion share buyback.

Miners and oil players rose. BHP gained 2.8 per cent, Rio added over 2 per cent, BP rose 1.6 per cent and Shell added 1.2 per cent tracking oil prices

Asian markets mixed on trial in property tax

Asian markets closed mixed. Tokyo’s Nikkei lost 0.7 per cent on a stronger Yen. Hong Kong’s Hang Seng closed flat amid news of a trial in property tax in China. Also Evergrande started work on more than 10 property projects. China’s Shanghai Composite closed 0.8 per cent higher.

ASX 200 lifts higher on commodity wave

Yesterday, the Australian sharemarket closed 0.3 per cent higher at 7,441 as miners and energy players charged the index higher. The gains were almost across the board with only two outliers, technology and industrials closing over 0.5 per cent lower.

Woodside Petroleum (ASX:WPL) soared 3.7 per cent after the energy producer unveiled a plan to build a $1 billion hydrogen and ammonia plant at Kwinana south of Perth. A move along its ESG line with the aim to boost renewable energy supplies overseas.

The enthusiasm transcended across the sector with fellow merger partner Santos (ASX:STO) jumping 3.6 per cent higher and Oil Search (ASX:OSH) climbing 3.5 per cent.

Origin Energy (ASX:ORG) surged 3.9 per cent after inking a $2.12 billion deal to sell a 10 per cent stake in the Australia Pacific LNG project to US-based energy investor EIG Partners. Before it can go ahead, fellow owners ConocoPhillips and Sinopec need to give the go ahead.

Telstra (ASX:TLS) rose 2.1 per cent on a partnership deal with the Australian government. The teleco giant is set to acquire Digicel Pacific telecommunications business for $2.1 billion. Telstra has earmarked a $360 million contribution in equity, while the balance will be funded by non-recourse debt and "equity-like" securities from the federal government.

Mineral Resources (ASX:MIN) revealed its plans to resume its 40 per cent owned Wodgina lithium mine joint venture in the third quarter of calendar year 20211. The project is in Western Australia's Pilbara region.

The best-performing stock in the S&P/ASX 200 was Mineral Resources (ASX:MIN) closing 8.96 per cent higher at $42.91. It was followed by shares in Beach Energy (ASX:BPT) and Ramelius Resources (ASX:RMS).

The worst-performing stock was Perpetual (ASX:PPT) closing 5.2 per cent lower at $38.83, erasing the over 9.0 per cent gain since Thursday’s bullish report. It was followed by shares in Kogan.com (ASX:KGN) and Nanosonics (ASX:NAN).

Local economic news

Today the weekly consumer confidence from ANZ and Roy-Morgan is due.

Company news

September quarter sales for Oil Search (ASX:OSH) 12 per cent to US$409 million from the previous quarter. The company said that gas and LNG prices rose 16 per cent in the period. Keep an eye out for more updates.

Broker moves

Morgans rates Flight Centre (ASX:FLT) as a hold with a price target of $19.50. In the third capital raising since the start of the pandemic, the company announced another $400 million convertible note to repay debt and fund growth. The broker notes that the shares are trading in-line with pre-covid levels on a fully diluted basis. Morgans also believes the flight booker is fairly priced however feels that staff shortages may weigh as demand increases. The target price rises to $19.50 from $18.60. Shares in Flight Centre (ASX:FLT) closed 2.1 per cent lower at $19.85.

Ex-dividend

There is one company trading ex-dividend today.

Southern Cross Electrical Engineer Ltd(ASX:SXE) is paying 4 cents fully franked

AGMs

There are 12 companies set to see their shareholders virtually today.

Bailador Technology Investments (ASX:BTI)
Bega Cheese (ASX:BGA)
Complii Fintech Solutions (ASX:CF1)
Peter Warren Automotive Holdings (ASX:PWR)
Pinnacle Investment Management Group (ASX:PNI)
Playside Studios (ASX:PLY)
Polynovo (ASX:PNV)
Redbubble (ASX:RBL)
Regis Healthcare (ASX:REG)
Sealink Travel Group (ASX:SLK)
SG Fleet Group (ASX:SGF)
Southern Cross Electrical Engineer (ASX:SXE)

Annual report

There are 16 companies set to report their annual results today.

A-Cap Energy (ASX:ACB)
ActivEX (ASX:AIV)
Ainsworth Game Technology (ASX:AGI)
Anatara Lifesciences (ASX:ANR)
Aspen Group (ASX:APZ)
BOD Australia (ASX:BOD)
Havilah Resources (ASX:HAV)
Heron Resources (ASX:HRR)
International Equities Corporation (ASX:IEQ)
Macquarie Telecom Group (ASX:MAQ)
Marmota (ASX:MEU)
Nucoal Resources (ASX:NCR)
Pacific Nickel Mines (ASX:PNM)
Pureprofile (ASX:PPL)
VDM Group (ASX:VMG)
Washington H. Soul Pattinson and Co. (ASX:SOL)

Quarterly Report

There are 39 companies set to report their quarterly results today including:

Evolution Mining (ASX:EVN)
Northern Star Resources (ASX:NST)
Paladin Energy Ltd (ASX:PDN)
Ramelius Resources (ASX:RMS)

IPO

There is one company set to make their debut on the ASX today. Keep an eye out for GQG Partners (ASX:GQG). They are a global asset management firm.

Commodities

Iron ore has lost 0.4 per cent to US$119.08. Its futures point to a 0.5 per cent fall.

Gold added $11.50 or 0.6 per cent to US$1808 an ounce, silver was up $0.19 or 0.8 per cent to US$24.64 an ounce.

Oil was down $0.23 or 0.3 per cent to US$83.53 a barrel.

Currencies

One Australian Dollar at 7:25 AM has strengthened from yesterday, buying 74.93 US cents, 54.42 Pence Sterling, 85.22 Yen and 64.54 Euro cents.

Investor event

We will see you today at our online investor event at 12.30pm with six companies presenting. To reserve your last minute spot, make your way to fnn.com.au.
 

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