CBA extends fall as weakness in banks continues: ASX closes 0.1% higher

Market Reports

by Melissa Darmawan

The Australian sharemarket snapped its 2-day losing streak rising by a hairline to close 0.1 per cent or 9 points higher at 7,379. The local bourse recovered from its 0.3 per cent dip to trade as high as 0.4 per cent before easing at the closing bell as banks continued to show weakness.

Energy shares fell 1.5 per cent pressured by the fall in the price of oil amid news that the Biden administration tapped on China’s shoulder to consider releasing oil reserves i a joint sale to put a lid on energy costs.

Whitehaven Coal (ASX:WHC) was the biggest drag in the sector and the worst performer of the day closing 4.5 per cent lower at $2.35, while shares in Santos (ASX:STO) closed 2.1 per cent lower at $6.70, followed by Oil Search (ASX:OSH) down 1.9 per cent at $4.16. Woodside (ASX:WPL) closed 1.7 per cent lower at $22.

Investors continued to sell out of Commonwealth Bank (ASX:CBA) with the share price closing 1.6 per cent lower at $97.46 amid several brokers downgrading its targets, extending its 8.1 tumble yesterday after the nation’s largest bank posted a shrinking net profit margin in a competitive home lending environment.

The decline trickled to the major four with National Australia Bank (ASX:NAB) shedding the least, down 0.7 per cent at $28.71 amid a decline in Aussie bond yields. Meanwhile, Macquarie (ASX:MQG) rose 1.1 per cent to a record high of $205.77.

In the winners corner, property was the star leading the local bourse, up 1.3 per cent followed by communication services, consumer staples, and healthcare.

Gold players rallied as the price of the safe haven metal rose with Northern Star (ASX:NST) rising 1.6 per cent at $10.49 while Newcrest Mining (ASX:NCM) rose 1.5 per cent at $25.02.

However, Evolution Mining (ASX:EVN) was the best performer of the session charging ahead with a 9.7 per cent gain after the gold miner cut a deal to take full control of Ernest Henry mine in Queensland for $1 billion, a move to increase their copper and silver exposure.

More on the M&A front, Treasury Wine Estates (ASX:TWE) surged 2.6 per cent after the wine maker unveiled plans to acquire Frank Family Vineyards in California's Napa Valley for $433 million. The acquisition is expected to be earnings per share accretive from day one funded with cash and debt in a move which fills the "luxury chardonnay" gap in its American portfolio.

Shares in Aristocrat Leisure (ASX:ALL) tumbled 3.6 per cent after gaming machine maker confirmed another rival offer is on the table for its UK-based takeover target Playtech. The online gaming giant also posted profit figures which fell due to an inflated $1 billion tax benefit from last year. This meant this year's net profit after tax fell 40 per cent to $820 million from this time last year. On an underlying basis, the poker machine giant saw figures close to pre-pandemic levels with the group’s profit growing 81 per cent to $865 attributed to the growth in mobile games and its North American gaming operations. Shares recovered from trading as low as 4.5 per cent lower as the worst performer of the session.

Among the miners, Rio Tinto (ASX:RIO) rose 0.7 per cent, BHP (ASX:BHP) added 0.3 per cent while Fortescue Metals (ASX:FMG) fell 1.6 per cent as the iron ore price is looking to dip. Mineral Resources (ASX:MIN) fell 2.2 per cent after flagging upwards pressure on operating costs in particular labour and staff expenses.

Elsewhere Sonic Healthcare (ASX:SHL) shared with investors that revenue grew by 5 per cent to over $3 billion while EBITDA rose 16 per cent to $991 million in the four months to October. Shares closed 3 per cent higher at $39.75.

Altium (ASX:ALU) is on track to hit earnings and revenue goals after a strong first four months. The software company is confident to achieve full-year revenue growth of 16 to 20 per cent in the order of US$209 to US$217 million, with an EBITDA margin of 34 to 36 per cent. Shares closed 3 per cent higher at $41.06.

Goodman (ASX:GMG) rose 1.8 per cent after the industrial property group said it had made a strong start to the financial year 2022 and reaffirmed earnings per share guidance growth "in excess of 15 per cent on FY21". The company continues to be the beneficiary of the e-commerce boom as retailers look to optimize distribution.

Telstra (ASX:TLS) rose 2 per cent amid a broker upgrade following its investor day after rallying 1 per cent on Wednesday. To check out what what Credit Suisse said click here and look at broker moves.

Asian markets are trading mostly lower following the negative lead from Wall Street amid inflation concerns and the fresh outbreak of Covid-19 cases in the region and in Europe.

Investors will look to Wall St for the weekly jobless claims figures plus data from two manufacturing indexes, the Philadelphia Federal Reserve and Kansas Federal Reserve for any signs of inflationary pressures as earnings season winds down.

Futures

The Dow Jones futures are pointing to a rise of 2 points.
The S&P 500 futures are pointing to a rise of 6 points.
The Nasdaq futures are pointing to a rise of 35 points.
The SPI futures are pointing to a rise of 8 points when the market next opens.

Best and worst performers

The best-performing sector was Real Estate Investment Trusts, up 1.3 per cent. The worst-performing sector was Energy, down 1.5 per cent.

The best-performing stock in the S&P/ASX 200 was Evolution Mining (ASX:EVN), closing 9.7 per cent higher at $4.40. It was followed by shares in Nufarm (ASX:NUF) and Appen (ASX:APX).

The worst-performing stock in the S&P/ASX 200 was Whitehaven Coal (ASX:WHC), closing 4.5 per cent lower at $2.35. It was followed by shares in Mesoblast (ASX:MSB) and ALS (ASX:ALQ).

Asian markets

Japan's Nikkei has lost 0.7 per cent.
Hong Kong's Hang Seng has lost 1.3 per cent.
China's Shanghai Composite has lost 0.1 per cent.

Commodities and the dollar

Gold is trading at US$1865.86 an ounce.
Iron ore is 0.5 per cent lower at US$89.95 a ton.
Iron ore futures are pointing to a fall of 2.7 per cent.
Light crude is trading $0.47 lower at US$77.08 a barrel.
One Australian dollar is buying 72.77 US cents.

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