Gold sparkles the ASX as jobless rate hits 13-year lows: Local bourse closes 0.1% higher

Market Reports

by Melissa Darmawan

Gold miners won the hearts of Aussie investors today outperforming in a session fronted with the nation’s December employment figures. The figures arrived on a backdrop of jitters where interest rate lift-off continues to eclipse the minds of market participants.

Traders were despondent after the tech-heavy Nasdaq tumbled into correction territory, bracing themselves on what was a busy day. The SPI futures pointed to a mild start, where stability was expected on hopes for a smoother session.

The local bourse snapped its two-day losing streak in a week where choppy moves have been pronounced. Materials was the best performer accelerating with pride appreciating by 3 per cent, supported by a boost in commodity prices.

China cut its one-year loan prime rate by 10 basis points, while its five-year loan prime rate, which influences the pricing of mortgage rates, was cut by 5 basis points. With borrowing costs reduced, the move is set to help boost the housing demand and bodes well for steel making miners back home.

Shares in Fortescue Metals Group (ASX:FMG) galloped 4.7 per cent at $21.39, while BHP Group (ASX:BHP) added 3.1 per cent at $48.01, while shares in Rio Tinto (ASX:RIO) closed 3.2 per cent higher at $113.41.

In fresh economic news, the unemployment rate in December fell to 4.2 per cent, its lowest in 13 years, beating consensus forecasts of 4.5 per cent. It was boosted by 65,000 new jobs added into the economy as the recovery from the Delta lockdowns continued. The figures spurred economists to forecast the RBA to end its quantitative easing program in February, with rate hikes brought forward to August this year.

The local bourse reacted accordingly to the figures which saw the Aussie dollar firm up after it hit above 72 cents this morning.

Meanwhile, Northern Star (ASX:NST) soared 11.2 per cent at $9.73 riding the momentum of the price of the precious metal, after posting a solid December-quarter report, with better than expected group production, while sales offset higher than expected costs. Kalgoorlie Consolidated Gold Mines delivered higher than expected production which offset softer performances from Pogo and Carosue Dam. The company is also on track to meet its financial year guidance. The gold miner notched the best performing stock while Evolution Mining (ASX:EVN) galloped 8.9 per cent at $4.15 coming in as the second best.

Woodside Petroleum (ASX:NST) jumped 1.5 per cent at $25.81 after posting higher realised prices for its liquefied natural gas in the December quarter, pushing the company's revenue for the period to a record high $4 billion (US$2.91 billion). Revenue beat expectations by 60 per cent, while the realised price of US$16 per million British thermal units for its liquefied natural gas cargoes surpassed expectations by 80 per cent. Production and sales volumes for the quarter fell short of expectations, but with buoyant liquefied natural gas prices continuing into the year.

Santos (ASX:STO) added 0.8 per cent at $7.26 after also posting a strong December-quarter report, as with rival Woodside (ASX:WPL) by a higher than forecast average realised price for its liquefied natural gas cargoes of US$13.64 metric million British thermal unit, up 33 per cent on the September quarter. The quarter included 20 days of production from Oil Search after the completion of its acquistion.

Netwealth (ASX:NWL) lost steam from session highs to close 0.2 per cent higher at $16.46. The investment platform provider posted strong net fund inflows of $3.6 billion in the December quarter. Funds under administration grew 9 per cent from the previous quarter to $56.7 billion, it rose 9 per cent in the quarter and 46 per cent over the year, while the total number of accounts grew 4.7 per cent in the quarter and 21.4 per cent over the year. With stronger than expected net flows, the company lifted its financial year 2022 net flow guidance from $12.5 billion to “exceed $13.5bn”.

Meanwhile, rival HUB24 (ASX:HUB) galloped 4.1 per cent to $28.55 amid several broker upgrades. Macquarie upgraded its rating to an outperform from neutral after net inflows for the second quarter beat estimates. The broker expects flow momentum will likely continue, and the company is positioned to benefit from a rising interest rate environment. The target price got a boost to $32.40 from $30.60 after the broker upgraded its forecast earnings.

Fertility care group Virtus Health (ASX:VRT) soared 7.7 per cent to $7.20 after revealing the news that they received a takeover offer from London-based investment firm CapVest Partners.

Rockmans and Katies’ owner Mosaic Brands (ASX:MOZ) flagged that first half earnings is set to “exceed broker estimates”, with online sales accounting for 40 per cent of revenue. Shares closed 3.3 per cent higher at 62 cents. Meanwhile, rival the owner of Just Jeans and Portmans Premier Investments (ASX:PMV) fell 3.2 per cent to $27.76.

Elsewhere, Block (ASX:SQ2) made its debut on the ASX following the $39 billion deal struck with Afterpay (ASX:APT) last year. Shares opened at $176.08 and added 55 cents.

Buy now pay later provider Zip Co (ASX:Z1P) posted $167.4 million in revenue for the December quarter, up 58 per cent from the year-earlier period notching a new record high however, came in below expectations. The Australia and New Zealand business performed well at the end of 2021 with user numbers improving and revenue growth assisted from a fee increase. Despite reasonable growth in customer numbers, total transaction value results in the US were lower than expected largely to lower usage per customer. Shares fell 1.4 per cent to $3.61.

Asian markets are moving higher buoyed by China’s second straight month cutting interest rates, while BHP shareholders are set to vote on whether to unify its corporate structure to one primary listing on the ASX.

At the closing bell, the S&P/ASX 200 was 0.1 per cent or 10 points higher at 7,342.

Futures

The Dow Jones futures are pointing to a rise of 152 points.
The S&P 500 futures are pointing to a rise of 21 points.
The Nasdaq futures are pointing to a rise of 88 points.
The SPI futures are pointing to a rise of 16 points when the market next opens.

Best and worst performers

The best-performing sector was materials, up nearly 3 per cent. The worst-performing sector was communication services, down 1.2 per cent.

The best-performing stock in the S&P/ASX 200 was Northern Star Resources (ASX:NST), closing 11.2 per cent higher at $9.73. It was followed by shares in Evolution Mining (ASX:EVN) and Chalice Mining (ASX:CHN).

The worst-performing stock in the S&P/ASX 200 was Kelsian Group (ASX:KLS), closing 5.7 per cent lower at $6.82. It was followed by shares in Uniti Group (ASX:UWL) and Webjet (ASX:WEB).

Asian markets

Japan's Nikkei has gained 1.3 per cent.
Hong Kong's Hang Seng has gained 2.5 per cent.
China's Shanghai Composite has gained 0.4 per cent.

Commodities and the dollar

Gold is trading at US$1839.28 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 0.5 per cent.
Light crude is trading $0.06 lower at US$85.74 a barrel.
One Australian dollar is buying 72.31 US cents.

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