Afterpay jumps off the Block on tech surge, Fortescue's rating gets downgraded: ASX up 0.8% at noon

Market Reports

by Lauren Evans

The Aussie market jumped at the open, swimming in positive territory as technology stocks rallied. The rebound is helped by shares from gold players, energy, and communication services after taking a strong lead from Wall Street. The local bourse is on track to snap its two-day losing streak. 

Energy sector is the best performer with the likes of Woodside Petroleum (ASX:WPL) trading 3.4 per cent higher, Beach Energy (ASX:BPT) up 2.1 per cent and Santos (ASX:STO) trading 2 per cent higher.

Technology sector is second best with buy-now, pay-later darling Afterpay (ASX:APT) pushing the sector higher by 5 per cent on news that the Bank of Spain has approved Block’s takeover. Elsewhere, Zip Co (ASX:Z1P) advanced 3.6 per cent while Xero (ASX:XRO) is trading 2.2 per cent higher.

The worst-performing sector is consumer staples, dragged down by Woolworths (ASX:WOW) and Metcash (ASX:MTS) by 0.7 and 1.8 per cent respectively, with the other sectors advancing. 

Resource stocks are performing well, supported by a rise in commodity prices. However, Fortescue Metals (ASX:FMG) is trading 1 per cent lower amid a broker downgrade, check out broker moves, Rio Tinto (ASX:RIO) is up 0.4 per cent, while BHP (ASX:BHP) is trading 1.5 per cent higher.

Gold players are rallying again with Northern Star (ASX:NST) and Newcrest Mining (ASX:NCM) both trading 3.4 per cent higher while Evolution Mining (ASX:EVN) is out on top, up by 4.2 per cent.

Meanwhile, financial stocks are trading mixed with Macquarie Bank (ASX:MQG) performing the best out of the banks, adding 1.9 per cent while the rest are trading around 0.1 per cent higher, while Commonwealth Bank (ASX:CBA) and National Australia Bank (ASX:NAB) have dipped lower by 0.1 per cent.

At noon, the S&P/ASX 200 is 0.8 per cent or 59 points higher at 7,449.

The SPI futures are pointing to a rise of 66 points.

Local economic news

National job advertisements fell by 2.5 per cent or 6,200 job positions in December 2021 to stand at 245,600 available positions as per the National Skills Commission, seasonally adjusted. This is the first decline in recruitment activity following the recovery from the impact of the Covid-19 Delta outbreak observed over the previous three months.

Meanwhile, the Australian Bureau of Statistics released job vacancies data for the November quarter 2021 with 396,000 job vacancies, 169,000 more than before the start of the pandemic, according to new seasonally adjusted figures. Private sector vacancies were 361,700 in the November quarter, an increase of 19.4 per cent from August. Public sector vacancies were 34,300, 9.7 per cent higher than August.

Company news

The Bank of Spain has given their tick of approval for Block’s takeover of Afterpay (ASX:APT). Afterpay's last day of trade will be this time next week, then by Thursday, Block is slated to start trading under ticker code SQ2. Shares are trading 5.1 per cent higher at $77.22.

Liontown Resources (ASX:LTR) has resumed trade after revealing its latest deal with South Korean-based LG Energy Solution to supply up to 150,000 dry metric tonnes per annum of spodumene concentrate, an ingredient to make batteries for electric vehicles. Shares are trading 2.9 per cent higher at $1.59.

In more mining news, Lithium Power (ASX:LPI) has revealed its plans to spin off its Western Australian hard rock lithium in the next six months. The split will create a separate entity which will look to list on the ASX. Shares are trading 0.9 per cent higher at 58.5 cents.

Broker moves

Citi downgraded Fortescue Metals (ASX:FMG) to a sell from neutral with an unchanged price target of $17.20. Despite the price of iron ore moving to the upside, analysts see a large valuation gap with peers. Shares in Fortescue Metals (ASX:FMG) are trading 1 per cent lower at $20.88.

Best and worst performers

The best-performing sector is energy, up 2.3 per cent. The worst-performing sector is consumer staples, down 0.4 per cent.

The best-performing stock in the S&P/ASX 200 is TPG Telecom (ASX:TPG), trading 5.6 per cent higher at $6.18. It is followed by shares in Nickel Mines (ASX:NIC) and Afterpay (ASX:APT).

The worst-performing stock in the S&P/ASX 200 is Domino Pizza Enterprises (ASX:DMP), trading almost 3 per cent lower at $108.86. It is followed by shares in Metcash (ASX:MTS) and Reece (ASX:REH).

Commodities and the dollar

Gold is trading at US$1821.13 an ounce.
Iron ore is 2.5 per cent higher at US$128.60 a ton.
Iron ore futures are pointing to a rise of 1.3 per cent.
One Australian dollar is buying 72.16 US cents.

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