Rout to rally: Tech on deck bolsters ASX rebound, up 0.1% at noon

Market Reports

by Melissa Darmawan

Technology names rebounded from Australia’s wounded sharemarket shot down on Russia’s incursion into Ukraine. The local bourse wiped $73 billion yesterday on its worst day since September 2020, launching the price of gold and oil higher.

The freefall was seen around sharemarkets across the globe as investors piled into gold and treasuries in a flight for the safety. The invasion prompted Prime Minister Scott Morrison to warn Aussie companies to strengthen their protections for direct malicious cyber attacks.

It comes at a time where investors have been monitoring economic data to bet on the timing of interest rate lift-off from global central banks in a bid to suppress hot inflation.

Wall St had a volatile session after tech-heavy Nasdaq traded as low as 3.5 per cent to then jump 3.4 per cent at the close. Dip buyers came in amid a falling US treasury yield as they reviewed future value on these growth tech names.

The moves have been mimicked here on the local bourse with the tech sector wiping out its losses from yesterday, soaring 8 per cent as sub-group helped by Afterpay owner Block (ASX:SQ2) posting a 62 per cent year-on-year gross financial year 2021 profit of $4.4 billion, helped by its fourth quarter results lifting 47 per cent year-on-year. Shares are transacting higher by over 34 per cent to $155.75.

In the winners corner is property, adding 1.4 per cent helped by results in Charter Hall’s (ASX:CHC) half year results for the six months ending December 31. Profit after tax for the property giant tripled to $517.8 million, revenue rose to $566 million from $248.3 million, while funds under management climbed to $79.5 billion from $52 billion, attributed to its continued strategy of partnering with tenant and investor customers. The company is set to pay an interim dividend of $8.33 per share. Shares are up 4.6 per cent to $16.72. 

Losses in the energy, consumer staples, financials and materials sector have been offset by the winners in today's mixed trade.

Risk appetite is back on the table following President Joe Biden slapping new sanctions against Russia, extending the number of Russian banks, elites and technology imports. Though Biden did not involve oil and gas or the SWIFT international banking system, which markets believed he should have done. Gold mining stocks fell following the price of the safe haven metal weakening. For more insights around the sanctions, what SWIFT is and what it means, join me here

At noon, the S&P/ASX 200 is 0.1 per cent or 9.70 points higher at 7,000.

The SPI futures are pointing to a rise of 27 points.

Company news

Medibank Private (ASX:MPL) posted a revenue jump of 4 per cent to $3.58 billion, while net profit fell 2.7 per cent to $220.2 million in its half year results for the six months ending December 31 as Covid-19 restrictions inhibited customers' ability to access their hospital and extras services. An interim dividend of 6.1 cents per share is set to be paid in March. Shares fell 1.3 per cent to $3.13.

Beauty company BWX (ASX:BWX) reported a net loss of $2.3 million, versus a profit of $9.7 million in the prior year period, for the six months ending December 31, sending its shares tumbling by over 25 per cent to $2.52. The decline was driven by the one-off impact of a $5.8 million benefit in first half 2021 from settlement of the Egide Compensation Plan to the sellers of the Andalou Naturals business, and costs in first half 2022 including one-off acquisition charges of $3.0 million and $3.5 million Chemist Warehouse cost of equity-linked strategic partnership expense.

Construction materials and lime producer Adbri (ASX:ABC) reported net profit after tax rose 25 per cent to $116.7 million, while underlying net profit after tax lifted 3 per cent to $119.1 million for the full year ending 31 December. The company’s revenue increased by 8 per cent to $1,569.2 million, driven by growth in all products except lime. Shares are trading 12 per cent higher at $3.37 (ASX:KGN) reported a loss of $11.87 million for the six months to December 31 from a profit of $23.59 million in the previous corresponding period as stay at home spending was rotated out to experiences. Shares dived 9.1 per cent to $5.10.

Best and worst performers

The best-performing sector is information technology, up 7.7 per cent. The worst-performing sector is energy, down 1.2 per cent.

The best-performing stock in the S&P/ASX 200 is Block (ASX:SQ2), trading 35.2 per cent higher at $156.85. It is followed by shares in Life360 (ASX:360) and Paladin Energy (ASX:PDN).

The worst-performing stock in the S&P/ASX 200 is Blackmores (ASX:BKL), trading over 13 per cent lower at $73.20. It is followed by shares in Magellan Financial Group (ASX:MFG) and St Barbara (ASX:SBM).

Commodities and the dollar

Gold is trading at US$1912.41 an ounce.
Iron ore is 0.8 per cent lower at US$136.95 a ton.
Iron ore futures are pointing to a fall of 1.8 per cent.
One Australian dollar is buying 71.57 US cents.

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