Building approvals slump, Energy boom extends ASX lift by 0.8% at noon

Market Reports

by Melissa Darmawan

Commodities hit multi-year highs, prompting traders to avoid Russian sales as the eastern European crisis intensifies. As concerns of shortfalls grew, local coal producers pushed higher, helping the Australian sharemarket jump 1.1 per cent at the open before a dim US futures emerged as shares pared back gains.

Energy, materials soar again

The ASX 200 is continuing from a 4-day winning streak as material and utility stocks join the winner’s circle with energy in almost a broad-rally. Consumer staples is the laggard while a small retreat has been seen by communication services and information technology.

Risk appetite grew after Fed Chair Jerome Powell testified before lawmakers, supporting an interest rate hike this month which put the bears to sleep and unleashed the bulls. The moves eased jitters of an aggressive interest rate lift-off on a volatile situation.

Investors have seen global markets swing on uncertainty about the path to normalisation before Putin painted red on Ukraine, sparking expanding sanctions from the West to Russia. Amid upcoming elections and central banks set to meet, talks about monetary and fiscal policies have come with caution. “Patient” and “nimble” have underpinned current moves.

In some individual stock standouts, Beach Energy (ASX:BPT) soared 4.7 per cent at $1.68 while Woodside Petroleum (ASX:WPL) is up 2.5 per cent at $31.20. Whitehaven Coal (ASX:WHC) was up around 10 per cent this morning before easing, trading 6.7 per cent higher at $3.81.

BHP Group (ASX:BHP) is up in the order of 3 per cent at $49.74, while Rio Tinto (ASX:RIO) and Fortescue Metals (ASX:FMG) are trading around over 1 to 2 per cent higher, respectively.

Australia’s trade surplus grew, building approvals slump

Australia's trade surplus increased to $12.9 billion in January from a downward revised $8.8 billion in the previous month, coming in better than economists expected. It was the largest trade surplus since last July as exports rose, while imports fell amid further growing global demand. Exports grew 8 per cent to an all-time high of $49.3 billion, while imports fell 2 per cent to a new record high of $36.4 billion over the month as per the Australian Bureau of Statistics.

Meanwhile the Bureau also unveiled a tumble of 28 per cent in January for the nation’s building approvals when compared to the month before, coming in much worse than the 3 per cent fall economists were expecting.

The Australia AiG Construction purchasing managers index (PMI) rose by 7.5 points to 53.4 in February, erasing the contraction from December 2021 to January this year. The latest results show that the sector is expanding with a score above 50 points.

This comes after Treasurer Josh Frydenberg said that the Omicron outbreak had not derailed the economy and despite issues around workforce absenteeism, a downward trend has been seen in the first two months of this year. 

ACC gives green light

Light on company news though, Corporate Travel Management (ASX:CTD) did receive a tick of approval from the competition regulator on its $175 million takeover of Helloworld (ASX:HLO). Corp Travel took off 2.1 per cent at $22.38, while Helloworld (ASX:HLO) jumped 3.7 per cent to $2.24 on the news.

Pointsbet Holdings (ASX:PBH) is on a ride as it continues to switch from the best and worst performing seat each day. Today, the wagering business is back in the black as the best performer on speculation that there is a merger in the horizon with a US giant.

In Asian markets, Japanese stocks are on the move thanks to tech and materials, reversing yesterday's losses while China is exploring exiting the Covid-zero strategy amid Hong Kong set to go into lockdown.

SPI futures
At noon, the S&P/ASX 200 is 0.8 per cent or 55 points higher at 7,172.

The SPI futures are pointing to a rise of 50 points.

Best and worst performers

The best-performing sector is energy, up 2.7 per cent. The worst-performing sector is consumer staples, down 1.1 per cent.

The best-performing stock in the S&P/ASX 200 is PointsBet Holdings (ASX:PBH), trading 15.5 per cent higher at $4.25. It is followed by shares in Whitehaven Coal (ASX:WHC) and Beach Energy (ASX:BPT).

The worst-performing stock in the S&P/ASX 200 is Block (ASX:SQ2), trading 3.1 per cent lower at $168.48. It is followed by shares in Coles Group (ASX:COL) and InvoCare (ASX:IVC).

Commodities and the dollar

Gold is trading at US$1929.43 an ounce.
Iron ore is 0.4 per cent higher at US$145.00 a ton.
Iron ore futures are pointing to a rise of 3.14 per cent.
One Australian dollar is buying 72.88 US cents.

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