Energy leads, Travel stocks rise, ANZ takes a hit: ASX closes 0.1% lower

Market Reports

by Lauren Evans

The Australian sharemarket closed in the red despite reduced losses in the afternoon session. Across the sectors, energy led while healthcare and real estate weighed on the market. Meanwhile, travel stocks popped higher after the Australian government announced the borders would open to vaccinated visa holders in two weeks time, while Magellan Financial (ASX:MFG) weighed on the market after Hamish Douglass announced his exit as chairman, director and chief investment officer of the group. 

Magellan Financial’s (ASX:MFG) co-founder is set to take a period of medical leave after a period of “intense pressure and focus” on both his personal and professional life. Co-founder Chris Mackay is slated to return to the investment team and oversee portfolio management for the interim, while Nikki Thomas will rejoin the business as a co-portfolio manager. Meanwhile, the board will continue its search to appoint an additional independent director. Shares closed 11.2 per cent lower at $16.43. 

Major banks were mixed as Macquarie Group (ASX:MQG) gained 0.9 per cent at $194.02 and Westpac (ASX:WBC) closed 0.2 per cent higher at $21.56, while ANZ Bank (ASX:ANZ) fell 1.9 per cent at $26.57 after reporting a drop in group net interest margin of 8 basis points over the first quarter, or 5 basis points on an underlying basis. National Australia Bank (ASX:NAB) declined 1.2 per cent lower at $27.57 and Commonwealth (ASX:CBA) closed 0.1 per cent lower at $94.

Energy stocks rallied amid multi-year high crude prices. Beach Energy (ASX:BPT) added 2 per cent at $1.53, Woodside Petroleum (ASX:WPL) was up 1.9 per cent at $26.76 and Santos (ASX:STO) closed 1.6 per cent higher at $7.57

Heavyweight miners finished higher led by BHP (ASX:BHP) up 1.2 per cent at $47.39, Fortescue Metals (ASX:FMG) rose 0.9 per cent at $21.53 and Rio Tinto (ASX:RIO) closed 0.07 per cent higher at $114.69.

Gold stocks closed lower with Northern Star (ASX:NST) down 1.8 per cent at $8.39, Evolution Mining (ASX:EVN) was down 0.6 per cent at $3.62 and Newcrest Mining (ASX:NCM) closed 0.3 per cent lower at $22.48.

At the closing bell, the S&P/ASX 200 was 0.1 per cent or 9 points lower at 7,111.

Local economic news

Australian retail sales rose 8.2 per cent in the December quarter 2021, its strongest quarterly rise on record, following a 4.4 per cent fall in the September quarter, seasonally adjusted as per the Australian Bureau of Statistics.

Sales volumes are now at their highest quarterly level of the series, up 3.4 per cent on the June quarter, and 3.6 per cent through the year.

The quarterly rise was driven by the spending in the discretionary industries, all of which saw a sharp fall in the September quarter.

Clothing, footwear and personal accessory retailing had the largest rise (43.1 per cent), followed by cafes, restaurants and takeaway food services (18.8 per cent), household goods retailing (9.0 per cent), department stores (25.0 per cent), and other retailing (6.8 per cent), in seasonally adjusted volume terms.

Job advertisements dropped by 0.3 percent in January compared to the month before, after a revised 5.8 per cent fall in December, pointing to the second straight month of decline.

Company news

Building material giant James Hardie (ASX:JHX) has raised its income guidance by 6 per cent to up to $890 million (US$630 million), from their previous guidance after a strong third quarter in which sales increased across the board. The company said its third quarter global net sales increased more than 22 per cent due to continued residential and market growth. Shares closed 1.7 per cent higher at $48.44.

Agribusiness GrainCorp (ASX:GNC) said that strong harvest, coupled with supply shortages and adverse weather conditions in the northern hemisphere, has contributed to “excellent” global demand. Strong supply chain margins for grain exports has also buoyed its results. The company expects to report full year EBITDA of $480 to $540 million which is above market expectations of $368 million. Shares are trading 12.5 per cent higher at $8.11. Shares closed 12.8 per cent higher at $8.13.

Start Entertainment Group (ASX:SGR) expects to report a loss in the first half of the 2022 financial year, with its earnings impacted by Covid-19 related shutdowns and restrictions. Shares closed 1.1 per cent higher at $3.59. 

Snowy Hydro has named CIMIC Group’s (ASX:CIM) UGL as the principal contractor for the construction of a 660MW power generation plant at the Hunter Power Project in Kurri Kurri, NSW. Shares closed 1 per cent lower at $16.64. 

Shares in Argo Investments (ASX:ARG) is up 0.2 per cent at $9.92 after the investment group increased its fully franked dividend after delivering a portfolio return of 7.3 per cent over the half based on its NTA growth. Shares closed 0.4 per cent higher at $9.94. 

Silver Lake Resources (ASX:SLR) will begin an on-market share buyback for up to 10 per cent of the company’s shares over the next 12 months. Shares closed 2 per cent higher at $1.54. 

Futures

The Dow Jones futures are pointing to a fall of 5 points.
The S&P 500 futures are pointing to a rise of 3 points.
The Nasdaq futures are pointing to a rise of 24 points.
The SPI futures are pointing to a fall of 28 points when the market next opens. 

Best and worst performers

The best-performing sector was Energy, up 1.6 per cent. The worst-performing sector was Real Estate Investment Trusts, down 1.4 per cent.

The best-performing stock in the S&P/ASX 200 was GrainCorp (ASX:GNC), closing 12.3 per cent higher at $8.10. It was followed by shares in Flight Centre Travel Group (ASX:FLT) and Corporate Travel Management (ASX:CTD).

The worst-performing stock in the S&P/ASX 200 was Magellan Financial Group (ASX:MFG), closing 11.2 per cent lower at $16.43. It was followed by shares in Appen (ASX:APX) and Unibail-Rodamco-Westfield (ASX:URW).

Asian markets

Japan's Nikkei has lost 0.8 per cent.
Hong Kong's Hang Seng has lost 0.1 per cent.
China's Shanghai Composite has gained 2.1 per cent.

Commodities and the dollar

Gold is trading at US$1810.46 an ounce.
Iron ore is 0.4 per cent higher at US$146.60 a ton.
Iron ore futures are pointing to a rise of 3.5 per cent.
Light crude is trading $0.24 lower at US$92.07 a barrel.
One Australian dollar is buying 70.88 US cents.
 

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