Energy takes tech's crown, Star falls after casino licence inquiry begins: ASX up 0.3% at noon

Market Reports

by Melissa Darmawan

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Energy takes tech's crown

The Australian sharemarket has followed US stocks, leading to energy shares claiming the winner’s title joined by miners and information tech players. Investors felt relief after a docket of central banks struck a less hawkish tone, raising interest rates in line with market expectations.

A refuted development in peace talks by the Kremlin saw commodity prices surge, prompting renewed concerns of failed hope of an imminent peace talk. Oil is still set for a second weekly loss after another volatile period. Amid this, the rebound in energy stocks follow a trail of losses where oil prices traded as high as US$130 a barrel shy of a week ago on concerns of a global supply shortage.

Given the muted trade for the local bourse, the market cap of the Aussie heavyweights are offsetting the number of sectors in the red. Utilities are riding the coattails with resources and information tech stocks, while losses are seen in consumer staples, healthcare and financials.

Macquarie Group (ASX:MQG) is the only lender rising, up 0.6 per cent at $192.70 while shares in the Commonwealth Bank of Australia (ASX:CBA) is leading the losses in the circle, down 0.6 per cent at $105.52 as gold player Evolution Mining (ASX:EVN) has taken a shine, up 0.9 per cent at $4.49.

Star Entertainment Group (ASX:SGR) has hit a 52-week low, trading 3.3 per cent lower to $3.20, a drag on the worst performing sector, consumer discretionary. The inquiry into the casino began by the NSW Independent Liquor & Gaming Authority with preliminary evidence suggesting that the Star Group hid $900 million in gaming transactions from banks disguised as hotel expenses to help high rollers gamble. All this comes out of the first day of public hearings and the enquiry into their licence.

Worst performers

In news, Abacus Property Group (ASX:ABP) is the second worst performer after completing its $200 million placement. The funds will be put aside for future CAPEX purposes.

While shares in Megaport (ASX:MG1) are the worst after chairman Bevan Slattery put $39.2 million worth of shares up for sale to facilitate "ongoing investment opportunities". The three million stock sale cuts his interest in the group to 5.1 per cent and he also provided reassurance that he does not have the intention to sell more stock over the next six months.

Qube Holdings (ASX:QUB) fell 0.3 per cent to $3 after the competition watchdog was concerned about potential impacts on the supply chain for bulk grain export through the Port of Newcastle.

Meanwhile, the federal court has given its tick of approval for the Posco-led consortium takeover of east coast oil and gas company Senex Energy (ASX:SSY), lifting shares 0.2 per cent higher at $4.60. This comes after a majority of shareholders approved the $900 million buyout this week.

In the nickel space, after surging over 9 per cent yesterday, a bit of profit-taking is seen in Poseidon Nickels (ASX:POS) trading 1.1 per cent lower at 9.4 cents after being a beneficiary of the Federal Government’s latest initiative. The miner unveiled its $119.6 million grant with partnership with Pure Battery Technologies from the Australian Government to develop its proposed battery material refinery hub yesterday.

Federal Budget 2022 talks begin

Elsewhere, Finance Minister Simon Birmingham says achieving job growth is a key focus ahead of the federal budget. Mr Birmingham says the government will be “maximising jobs growth”, pointing to the current unemployment rate of four per cent.

While the treasurer Josh Frydenberg says improved economic conditions will allow the government to deliver a “targeted” cost of living package in this month’s budget, saying “crisis level economic support must not become entrenched…..With our tight labour market and our strong economic recovery, continued support at those levels would do more harm than good. It would risk putting further pressure on inflation, interest rates and cost of living”.

Muted start in Asia

In Asian markets, Tokyo’s Nikkei index also had a muted start, hugging the flatline as investors turned cautious after its bounce back ahead of a long weekend.

At noon, the S&P/ASX 200 is 0.3 per cent or 21 points higher at 7,272.

SPI futures

The SPI futures are pointing to a rise of 12 points.

Best and worst performers

The best-performing sector is energy, up 2.1 per cent. The worst-performing sector is consumer staples, down 0.7 per cent.

The best-performing stock in the S&P/ASX 200 is Paladin Energy (ASX:PDN), trading 8.3 per cent higher at $0.85. It is followed by shares in Block (ASX:SQ2) and Zip Co (ASX:Z1P).

The worst-performing stock in the S&P/ASX 200 is Megaport (ASX:MP1), trading 7.2 per cent lower at $13.12. It is followed by shares in Abacus Property Group (ASX:ABP) and Clinuvel Pharmaceuticals (ASX:CUV).

Commodities and the dollar

Gold is trading at US$1941.95 an ounce.
Iron ore is 1.0 per cent higher at US$146.90 a ton.
Iron ore futures are pointing to a rise of 2.73 per cent.
One Australian dollar is buying 73.88 US cents.

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