Technology rout widens amid Ukraine tension, Energy stocks get bullish: ASX down 0.9%

Market Reports

by Melissa Darmawan

Reporting season continues to unleash on the local bourse as the technology sell-down deepens. Investors monitor uneasy headlines on Russia and Ukraine, shooting down equities while adding a bullish sentiment to energy stocks.

The Australian sharemarket dived 1.4 per cent in early trade on almost a broad-based rout. Bond yields fell, prices rose as investors sought refuge in treasury notes. US futures pointing to a steep fall compounded weak sentiment in an underwhelming performance today, which was expected.

Technology stocks as the underperformers were joined by consumer discretionary, financials, and communication services. A lift in energy stocks supported by the underlying commodity price was joined by consumer staples as investors pile into stocks that have pricing power, the ability to pass on price rises to the customer.

Helping lift the sub-index is Costa Group (ASX:CGC) after the fruit and vegetable giant unveiled its full year 2021 results, showcasing its continued earnings momentum. Its international segment rose 30 per cent from the same time a year ago, contributing to a 16.2 per cent rise in net profit after tax to $64 million. The fruitful results highlighted a beat across all divisions with China yields and demand above expectations with its Moroccan berry harvest building against a strong demand backdrop. Meanwhile, avocados sales weighed on profits attributed to lockdowns and low retail prices. A final dividend of five cents per share is set to be paid in April. Shares harvested a 5.3 per cent ripe at $3.16.

Also Coles (ASX:COL) are on the move by over 2 per cent to $17.13 after its revenue jumped 1 per cent to $20.8 billion, while its earnings before interest and taxes fell 4.4 per cent to $975 million for its half year results for the 27 weeks ending January 2, a period impacted by Covid-19 costs. 

On the other hand, shares in Seven Group Holdings (ASX:SVW) tumbled over 3 per cent to $21.62 after lifting earnings growth from 8 to 10 per cent for the financial year 2022, while Wesfarmers (ASX:WES) is adding further pressure to the local bourse, trading 2.4 per cent lower to $49.06 as they trade ex-dividend. Shares in Cochlear (ASX:COH) surged 5.6 per cent to $200.95 after posting its half year results for the six months ending December 31. The ear specialist’s sales revenue lifted 10 per cent to $815 million, while statutory net profit fell 28 per cent to $169 million and earnings before interests and taxes dipped 3 per cent to $234 million. 

The best performer of the session is wealth platform provider HUB24 (ASX:HUB) after company's statutory profit lifted 37 per cent to $8.4 million, while its revenue increased 70.5 per cent to $80.3 million and its underlying EBITDA rose 80 per cent to $29.7 million for its half year results for the six months ending December 31. The worst performer is Nanosonics (ASX:NAN) after posting a 45 per cent slump in its half year results ending December 2021.

Miners are trading lower despite the rise in the iron ore price with BHP (ASX:BHP), leading the losses by 1 per cent while major banks are declining, with Commonwealth Bank (ASX:CBA) and National Australia Bank (ASX:NAB) both down 1.7 per cent though Westpac Bank (ASX:WBC) and ANZ Bank (ASX:ANZ) are shedding the least by 0.9 per cent.

Elsewhere, Asian markets are weaker with Japan Nikkei extending its declines by 1.8 per cent while Hong Kong markets are softer by 0.7 per cent at time of writing.

At noon, the S&P/ASX 200 is 0.9 per cent or 64 points lower at 7,170.

The SPI futures are pointing to a fall of 96 points.

Local economic news

Consumer confidence decreased 1.4 points to 101.8 during the third week of February. Consumer confidence is now 7.4 points below the same week a year ago, February 20/21, 2021 (109.2), but remains just above the 2022 weekly average of 101.5 according to ANZ and Roy Morgan.

The statement said consumer confidence this week was down around the country with the largest decreases in NSW and Tasmania. Bucking the trend, Victoria’s Consumer confidence increased 3 points (107.8). Driving the decreases were falls in sentiment regarding the performance of the Australian economy over the next year and whether now is a ‘good/bad time to buy’ major household items.

Best and worst performers

The best-performing sector is Consumer Staples, up 0.8 per cent. The worst-performing sector is Information Technology, down 3.5 per cent.

The best-performing stock in the S&P/ASX 200 is HUB24 (ASX:HUB), trading 7.7 per cent higher at $25.34. It is followed by shares in Cochlear (ASX:COH) and Costa Group Holdings (ASX:CGC).

The worst-performing stock in the S&P/ASX 200 is Nanosonics (ASX:NAN), trading 10.4 per cent lower at $4.23. It is followed by shares in Uniti Group (ASX:UWL) and Chalice Mining (ASX:CHN).

Commodities and the dollar

Gold is trading at US$1912.30 an ounce.
Iron ore is 4.1 per cent higher at US$139.00 a ton.
Iron ore futures are pointing to a rise of 4.0 per cent.
One Australian dollar is buying 71.84 US cents. 

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