ASX pares losses, US & Russia agree to summit, Tyro Payments tumbles

Market Reports

by Lauren Evans

The Australian sharemarket has pared its losses from the early trade following news US President Joe Biden and Russian President Vladimir Putin have agreed to meet, easing some fears of an imminent invasion of Ukraine. With the reporting season in full swing, sectors are mixed. Technology is weighing the most while utilities are dominating as the best performer. 

The Elysee Palace in Paris released a statement just a few minutes ago announcing both Biden and Putin had agreed to a summit to “discuss security and strategic stability in Europe”. The summit was proposed by French President Emmanuel Macron, who spoke on the phone to both Biden and Putin.

Tyro Payments (ASX:TYR) is weighing heavily on the tech sector, down 25.6 per cent as the worst-performing stock following its half year results. Altium (ASX:ALU) has also dropped 6.2 per cent to $32.33 after reporting on its half year. Altium said that while its profit and revenue rose, first half performance should be compared to a low-base last year that was impacted by Covid. 

Onto banks, Westpac Banking Corporation (ASX:WBC) has added 0.3 per cent to $23.61, Macquarie (ASX:MQG) is up 0.1 per cent to $191.35 and National Australia Bank (ASX:NAB) is also up 0.1 per cent to $30.62. While ANZ  (ASX:ANZ) is trading 0.4 per cent lower at $28.04 and Commonwealth (ASX:CBA) is trading 0.1 per cent lower at $97.65.

Energy stocks are mixed with Woodside Petroleum (ASX:WPL) up 2 per cent to $27.98, while Santos (ASX:STO) is down 1.6 per cent to $6.89 and Beach Energy (ASX:BPT) is trading 0.2 per cent lower at $1.49.

Heavyweight miners are higher except Fortescue Metals (ASX:FMG) trading 1.3 per cent lower at $19.59. Rio Tinto (ASX:RIO) has added 1.1 per cent to $120.60 and BHP Group (ASX:BHP) is also trading 1.1 per cent higher at $48.48.

Gold stocks are higher, led by Northern Star (ASX:NST) adding 2.5 per cent to $9.82. Newcrest Mining (ASX:NCM) has risen 1.6 per cent to $24.75 and Evolution Mining (ASX:EVN) is trading 1.5 per cent higher at $4.20.

Elsewhere, AGL Energy (ASX:AGL) has rejected a joint bid from founder of software giant Atlassian Mike Cannon-Brookes and Canadian asset management giant Brookfield to take control of the company. Shares are trading 11.2 per cent higher at $7.96, and is the third-best stock.

A2 Milk’s (ASX:A2M) profit has halved in the first six months of the financial year as China’s demand for infant-formula fell amid the country's declining birth rate. The company’s revenue fell by 2.5 per cent to $616.4 million (NZ$660.5 million), while profit declined 50.3 per cent to $55.6 million (NZ$59.6 million). EDITDA tanked 45.3 per cent to $91.1 million (NZ$97.6 million). A2 Milk did not declare an interim dividend. Shares are trading 10.9 per cent higher at $5.88. 

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At noon, the S&P/ASX 200 is 0.1 per cent or 8 points higher at 7,230.

The SPI futures are pointing to a fall of 6 points.

Local economic news 

The flash purchasing managers’ index for February was released. 

Australia composite output Index Feb: 55.9, 8-month high (Jan final: 46.7). 
Australia services business activity index: Feb: 56.4, 8-month high (Jan final: 46.6).
Australia manufacturing output index Feb: 52.5, 2-month high (Jan final: 47.5).
Australia manufacturing PMI Feb: 57.6, 2-month high (Jan final: 55.1).

The report said the easing of the Covid-19 Omicron wave enabled Australia’s private sector to return to growth in February. Private sector output and demand both expanded after shrinking at the start of the year, leading to higher employment levels. Supply constraints persisted, causing the accumulation of backlogged work and the worsening of price pressures with output price inflation rising to a record. Meanwhile business optimism improved in February. 

Company news 

Reliance Worldwide (ASX:RWC) released its half year results for the six months ending December 31. Its net profit after tax fell by 3.3 per cent to $88.3 million (US63.7 million), while its revenue rose 12.4 per cent to $727.3 million (US 521.8 million) and its adjusted EBITDA lifted 5 per cent to $174.9 million ($US125.5 million). The company said strong demand was driven by high levels of home remodelling and buoyant residential construction markets. However, Covid-19 challenges like supply chain constraints still restricted volume growth. Reliance will pay an interim dividend of 6.3 cents per share (US4.5 cents). Shares are trading 1.2 per cent higher at $5.15.

Nib (ASX:NHF) also delivered its half year results for the six months ending December 31. The company’s revenue rose 7 per cent to $1.4 billion, while profit climbed 25 per cent to $81.4 million. The health insurer said ongoing Covid-19 lockdowns and restrictions on non-urgent elective surgery disrupted healthcare treatment during the first half. However, some treatments are likely to have been postponed to future periods and not cancelled entirely. Nib declared an interim dividend of 11 cents per share. Shares are trading 0.2 per cent lower at $6.63. 

Best and worst performers

The best-performing sector is Utilities, up 3.9 per cent. The worst-performing sector is Information Technology, down 2.8 per cent.

The best-performing stock in the S&P/ASX 200 is Chorus (ASX:CNU), trading 11.4 per cent higher at $6.95. It is followed by shares in The A2 Milk Company (ASX:A2M) and AGL Energy (ASX:AGL).

The worst-performing stock in the S&P/ASX 200 is Tyro Payments (ASX:TYR), trading 25.6 per cent lower at $1.62. It is followed by shares in Super Retail Group (ASX:SUL) and PointsBet Holdings (ASX:PBH).

Commodities and the dollar

Gold is trading at US$1896.31 an ounce.
Iron ore is 2.2 per cent higher at US$133.50 a ton.
Iron ore futures are pointing to a rise of 1.9 per cent.
One Australian dollar is buying 72.00 US cents.

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