Commodities rally again, Crown soars on sweetened bid: ASX up 0.5% at noon

Market Reports

by Melissa Darmawan

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Extending its rally are resources stocks supported by a boost in commodity prices to lift the Australian sharemarket higher. This followed the lead up to the state of inflation in China and in the US, after the latest Fed minutes last week spurred a technology rout in global markets after market participants priced in a series of aggressive rate hikes.

The sell-off in tech names amid the climb in the US-10 year treasury yield concerned traders which saw weakness in future earnings of growth stocks if interest rates rises.

The new year has been underpinned by volatility as uncertainty continues to percolate about the length and the impact of the Omicron wave on economies. With the Fed's hawkish tilt on monetary policy to combat hot and persistent inflation, on the backdrop of a tight labour market, the consumer price reading was a focus as market participants looked for how the figures could influence the Fed and its interest rate hike timeline.

Wall St consolidated after the December consumer price index reading hit 40-year highs of a seven per cent rise over the year to December. However, since the numbers were in line with expectations, traders shrugged off the fresh data print.

Materials was the best performer on the S&P 500 and today the local market is mirroring this lead. The sector is up 2.4 per cent amid the weaker greenback, BHP (ASX:BHP) is up 3.7 per cent, Rio Tinto (ASX:RIO) is up 3.4 per cent while Fortescue Metals (ASX:FMG) is trading 2 per cent higher.

However, base metal miners are taking the spotlight with Nickel Mines (ASX:NIC) rallying again after the nickel price hit its highest level in a decade by 1.1 per cent, and Pilbara Minerals (ASX:PLB) as the second best performer of the session so far.

Meanwhile, US private equity giant Blackstone has raised its non-binding proposal to buy Crown (ASX:CWN) shares at a price of $13.10 cash per share valuing the bid at $8.9 billion. This is up from the $12.50 offer in November at a bid value of $8.5 billion. The new deal is subject to Blackstone completing due diligence, with the interim offer already having approval from Crown's board. Shares are galloping and the casino titan is taking the winner’s title.

Outside of this, technology stocks are faring poorly as the worst performer by 1 per cent. Afterpay (ASX:APT) has wiped off 3.2 per cent of it 5 per cent gain yesterday after receiving approval from the Bank of Spain yesterday, while Xero (ASX:XRO) is trading 0.5 per cent lower.

The banks are moving higher with National Australia Bank (ASX:NAB) and ANZ (ASX:ANZ) up over the 1 per cent band while Macquarie Bank (ASX:MQG) is adding the least by 0.4 per cent.

In Asian markets, Japan’s Nikkei is weaker after snapping its losing streak yesterday while the local market is set to wipe out its losses this week.

At noon, the S&P/ASX 200 is 0.5 per cent or 39 points higher at 7,478.

The SPI futures are pointing to a rise of 29 points.

Company news

Skincare giant BWX (ASX:BWX) has promoted Rory Gration to group chief executive and managing director from March 1. He will succeed Dave Fenlon, who will remain on the board as a non-executive director. Shares nose dived 13.3 per cent lower at $3.78

Software company Objective Corporation (ASX:OCL) has released a trading update for the first half of the financial year 2022 with a beat across the board. Highlights include a 35 per cent rise in net profit after tax compared to the same time a year ago, along with a 59 per cent increase in their cash balance at $27.7 million. Shares are trading 3.5 per cent higher at $17.54

Best and worst performers

The best-performing sector is materials, up 2.4 per cent. The worst-performing sector is information technology, down 1 per cent.

The best-performing stock in the S&P/ASX 200 is Crown Resorts (ASX:CWN), trading 8.3 per cent higher at $12.60. It is followed by shares in Pilbara Minerals (ASX:PLS) and Chalice Mining (ASX:CHN).

The worst-performing stock in the S&P/ASX 200 is PolyNovo (ASX:PNV), trading 6.5 per cent lower at $1.72. It is followed by shares in Sonic Healthcare (ASX:SHL) and Janus Henderson Group (ASX:JHG).

Commodities and the dollar

Gold is trading at US$1824.77 an ounce.
Iron ore is 2.3 per cent higher at US$131.60 a ton.
Iron ore futures are pointing to a rise of 1.6 per cent.
One Australian dollar is buying 72.84 US cents.

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