Jobless rate hits 4.2%, AUD firms up, Block debuts: ASX down 0.2% at noon

Market Reports

by Melissa Darmawan

Aussie stocks have extended losses for its third straight day, trading at one-month lows led by declines in financial and tech majors. The losses are offsetting a rally in resources stocks on concerns about stunted future earnings, when interest rates lift-off to suppress soaring inflation.

The local bourse is trading at one month lows after the tech-heavy Nasdaq closed in correction territory from November 2021 highs, overshadowing strong company earnings on Wall St.

Market participants braced themselves for a busy day after high trading volumes yesterday as traders said goodbye to Afterpay (ASX:APT) and said good-day to Block which started trading at 11am (AEST) under ticker code SQ2 (ASX:SQ2) at $176.08 per share.

The performance has been choppy all morning in anticipation of the job figures as investors digested fresh company news. The nation added 65,000 new jobs in December versus expectations of 60,000, the unemployment rate fell to 4.2 per cent versus expectations of 4.5 per cent, and the participation rate remained steady at 66.1 according to the Australian Bureau of Statistics. The unemployment rate came in at the lowest in the monthly series, since February 2008. The index reacted positively to the update, attempting to make up for lost ground as quarterly and half yearly updates continued to plate investors.

Stronger commodity prices and higher sales volumes helped Santos (ASX:STO) post record quarterly revenue and annual profit results, boosted by a $21 billion merger with Oil Search that was completed last year. However, the output in the December 2021 quarter fell to 22.9 million barrels of oil equivalent from 25.4 million barrels of oil equivalent from the same period in 2020. Calendar year 2021’s annual output was 92.1 million barrels of oil equivalent, 3.5 per cent higher from 2020. Shares are trading 0.2 per cent lower at $7.18.

Meanwhile, Northern Star (ASX:NST) defied the skills shortage and posted a rise in gold output in the December quarter from the prior quarter. Shares continues to rise trading 9.1 per cent higher at $9.55. The gold miner said its local operations performed in line with expectations in the period, but its Pogo mine in Alaska lagged again. The company is on track to meet its financial year guidance this year.

Its gold mining peers are benefiting from the price of the precious metal rising to two month highs, as investors sought refuge in the safe haven metal with Newcrest Mining (ASX:NCM) is trading 4.8 per cent higher at $25.11, while Evolution Mining (ASX:EVN) is the best performer of the session.

Funds under administration at Netwealth (ASX:NWL) were propelled higher by 9 per cent to $56.6 billion in the December quarter with shares reacting accordingly, up 1.3 per cent at $16.64. The company has raised its target for inflows to $13.5 billion for funds under administration as they continue to experience favourable conditions.

Aussie BHP shareholders are counting down to 6pm (Melbourne time) to vote for the miner to unify its structure through a virtual event in Australia which will be followed by British shareholders later tonight. The stapling of the two will see BHP’s market capitalization grow from around 6 per cent to 10 per cent on the local bourse. Shares in BHP Group (ASX:BHP) are trading 3 per cent higher at $47.93, followed by Fortescue Metals (ASX:FMG) added 3.1 per cent higher at $21.07, and Rio Tinto (ASX:RIO) is trading 2.4 per cent higher at $112.86 underpinned by a boost in the iron ore price amid China's cash injection, and interest rate cuts to help stimulate the economy as infrastructure developments get underway.

Across the banks, Macquarie Group (ASX:MQG) is leading the declines trading 1.4 per cent lower at $196.34, while ANZ Banking Group (ASX:ANZ) is shedding the least, down 0.4 per cent at $28.45.

In Asian markets, Japan’s Nikkei is off to a positive start trading 0.3 per cent higher with the US futures pointing to a mild rise.

At noon, the S&P/ASX 200 is 0.2 per cent or 12 points lower at 7,320. The SPI futures are pointing to a fall of 16 points.

Best and worst performers

The best-performing sector is materials, up 2.6 per cent. The worst-performing sector is communication services, down 1.2 per cent.

The best-performing stock in the S&P/ASX 200 is Evolution Mining (ASX:EVN), trading almost 10 per cent higher at $4.19. It is followed by shares in Northern Star Resources (ASX:NST) and Perseus Mining (ASX:PRU).

The worst-performing stock in the S&P/ASX 200 is Premier Investments (ASX:PMV), trading 3.9 per cent lower at $27.53. It is followed by shares in Webjet (ASX:WEB) and Viva Energy Group (ASX:VEA).

Commodities and the dollar

Gold is trading at US$1841.67 an ounce.
Iron ore is 2.3 per cent higher at US$130.20 a ton.
Iron ore futures are pointing to a rise of 0.7 per cent.
One Australian dollar is buying 72.39 US cents.

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