ASX closes 0.4% higher, Afterpay falls: ASX gains 1.8% over the week

Market Reports

by Lauren Evans

The Australian sharemarket maintained momentum in the afternoon session, ending the week on a positive note. At the closing bell, the S&P/ASX 200 was 0.4 per cent or 29 points higher at 7,457. Over the week, it closed 1.8 per cent or 133 points higher.

Across the sectors, 9 out of 11 closed in the green. Technology was the worst-performing sector, down 1.6 per cent, with energy down 0.6 per cent. Meanwhile, communication services were the best-performing sector, up 1.7 per cent, followed by consumer staples, up 1.2 per cent, utilities, up 1 per cent, and materials, up 0.8 per cent. 

The best-performing stock in the S&P/ASX 200 was Link Administration (ASX:LNK), closing 8.6 per cent higher after receiving a non-binding takeover offer from Carlyle Asia Partners. The worst-performing stock in the S&P/ASX 200 was Clinuvel Pharmaceuticals (ASX:CUV), closing 12.5 per cent lower.

In company news, media giant News Corp and online real estate advertiser REA Group both surged after releasing positive quarterly results. News Corp (ASX:NWS) closed 7.3 per cent higher and REA (ASX:REA) closed 5.2 per cent higher. 

Heavyweight miners were steady as iron ore traded flat at US$99.70 a ton. Rio Tinto (ASX:RIO) and Fotescue Metals (ASX:FMG) both closed 0.8 per cent higher, while BHP (ASX:BHP) closed 0.4 per cent higher. Gold miners Northern Star Resources (ASX:NST) and Newcrest Mining (ASX:NCM) closed 6.3 and 3.4 per cent higher. 

Retail giants lifted higher with Woolworths (ASX:WOW) closing 1.4 per cent higher, Endavour (ASX:EDV) closing 1.8 per cent higher and Wesfarmers (ASX:WES) closing 2 per cent higher. Cromwell Property Group (ASX:CMW) also closed 4.9 per cent higher. 

Major banks finished higher, except Westpac (ASX:WBC) down 0.2 per cent after trading ex-dividend today. Commonwealth (ASX:CBA) led the pack, up 1.2 per cent, with NAB (ASX:NAB) up 0.6 per cent and ANZ (ASX:ANZ) up 0.1 per cent. 

Amongst the losses, energy giant Woodside Petroleum (ASX:WPL) closed 1.8 per cent lower, while buy now, pay later provider Afterpay (ASX:APT) closed 5.4 per cent lower following its acquisition with US payment software Square. 

Local economic news

The Reserve Bank released the quarterly Statement on Monetary Policy. Conditions are in place for a sustained global recovery. Global goods demand has remained strong even as services activity rebounds. This has strained global supply chains and logistics networks, as have disruptions to supply in some sectors.

In Australia, the recovery from the Delta outbreak is also underway. The setback to the economy from this outbreak was significant; GDP is expected to have contracted by around 2½ per cent in the September quarter, and hours worked declined by 3 per cent.

Australia has experienced some of the same upward pressure on prices as seen globally, but to a much lesser extent. The factors pushing up non-oil energy prices in some other economies are less relevant here. Labour supply has recovered quickly, which has meant less upward pressure on wages, and it will expand further as the borders reopen.

Inflation was higher than expected in the September quarter. Headline inflation was 0.8 per cent in the quarter and 3 per cent over the year. Underlying inflation was 0.7 per cent in the quarter and 2.1 per cent over the year. About two-thirds of the quarterly increase in headline CPI was accounted for by sharp rises in two components: petrol prices; and home-building costs.

The outlook is for underlying inflation to pick up gradually over the next couple of years, as the economy recovers further and spare capacity is absorbed. In the central scenario, trimmed mean inflation is forecast to be 2¼ per cent at the end of 2022 and around 2½ per cent by the end of 2023.

Meanwhile, the Australian Industry Group released the Australian Performance of Services Index, which rose by 1.9 points to 47.6 points in October 2021. This marked a third month in decline in 2021, following a strong recovery in conditions earlier in the year. Results below 50 points indicate contraction in the Australian PSI®, with lower numbers indicating a stronger contraction.

Company news

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Online real estate advertiser REA Group (ASX:REA) has recorded revenue excluding acquisitions of $264 million for the September quarter, up 22 per cent year-on-year driven by an increase in free cash flow and national listings.

Funds management group Pendal (ASX:PDL) has reported an increase in profit for the 12 months ending 30 September 2021, driven by growth in revenue and funds under management (FUM).

Superannuation admin industry Link Administration (ASX: LNK) has received a non-binding takeover proposal from Carlyle Asia Partners, an investment fund managed by the Carlyle Group.

Media giant News Corporation (ASX:NWS) has reported revenue of $2.5 billion for the September quarter, up 18 per cent year-on-year, driven by growth across all segments.
 
Futures

The Dow Jones futures are pointing to a fall of 25 points.
The S&P 500 futures are flat.
The Nasdaq futures are pointing to a rise of 9 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 Communication Services, up 1.7 per cent. The worst-performing sector was Information Technology, down 1.6 per cent.

The best-performing stock in the S&P/ASX 200 was Link Administration Holdings (ASX:LNK), closing 8.6 per cent higher at $4.70. It was followed by shares in News Corporation (ASX:NWS) and Northern Star Resources (ASX:NST).

The worst-performing stock in the S&P/ASX 200 was Clinuvel Pharmaceuticals (ASX:CUV), closing 12.5 per cent lower at $35.50. It was followed by shares in Virgin Money UK (ASX:VUK) and Afterpay (ASX:APT).

Asian markets

Japan's Nikkei has lost 0.7 per cent.
Hong Kong's Hang Seng has lost almost 1 per cent.
China's Shanghai Composite has lost 0.3 per cent.

Wall Street

Over the last four trading days, the Dow Jones gained 0.8 per cent, the S&P 500 gained 1.6 per cent and the Nasdaq gained 2.8 per cent.

Commodities and the dollar

Gold is trading at US$1795.46 an ounce.
Iron ore is flat at US$99.70 a ton.
Iron ore futures are pointing to a fall of 2.5 per cent.
Light crude is trading $0.66 higher at US$79.47 a barrel.
One Australian dollar is buying 73.95 US cents.

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