Stocks stage rally to finish choppy week: ASX up 0.4% at noon

Market Reports

by Melissa Darmawan

The Australian sharemarket is in rally mode for its fourth straight day up near a two month high, even as investors assess several cross currents and the impact of the growth of the global economy.

Traders are mulling over what it means for commodity prices amid the war in Ukraine, while assessing the effect of rising interest rates in a fight to combat hot and persistent inflation.

The theme of international diplomacy is front and centre as the European Union, a group of seven of the world's biggest economies and US President Biden met in Brussels in Europe to start talks on how to give support to Ukraine and end the war with Russia. It's been exactly a month now since Russia’s incursion into that country.

Materials rally for 2nd day, tech & healthcare weighs

Material stocks are in the winner’s circle, rising 1.2 per cent with gains of over 1 per cent in the iron ore mining heavyweights like BHP (ASX:BHP), and Rio Tinto (ASX:RIO). Bluescope Steel (ASX:BSL) is the best performer of the session while pushing the material sector higher.

Also in the circle are your stocks that tend to perform well in a rising rate environment such as property, up 1 per cent, utilities, and consumer discretionary stocks trading 0.7 per cent higher each.

Healthcare stocks are falling for its second straight day, down 0.7 per cent weighed down by Telix Pharmaceuticals (ASX:TLX) who happens to be also the worst performer of the session, tumbling over 14 per cent on no ASX company announcement. However, a few days ago, the biotech said the buildout of its radiopharmaceutical production facility in Brussels South, Belgium has started, securing a $18.2 million debt financing facility.

Other sectors in the loser’s circle are information tech, dipping 0.6 per cent while consumer staples are hugging the flat line on the positive front.

Stocks we are watching

From the stocks we are watching, Atlas Arteria (ASX:ALX) is trading 2 per cent lower to $6.58 amid a broker downgrade from Morgans to a hold from an add with a price target of $6.41, a 4.6 per cent cut from yesterday’s closing price.

Macquarie also downgraded the Atlas Arteria (ASX:ALX) to neutral from outperform with its target price trimmed to $6.66 from $7.09 after an unfavourable exchange rate was taken into account. Additionally, French fuel prices have surged by 60 per cent from 2019 levels with car trips set to be cut by up to seven per cent.

Uniti shares on the move, again

Uniti (ASX:UWL) shares are on the move, up 2.7 per cent to $4.76. At time of writing, it’s up over 15 per cent for the week. Brookfield has joined the bidding war, teaming up with HRL Morrison to take on a Macquarie-led group who lobbied a $5 per share bid for the infrastructure-focused telco.

Record dividend by Premier, boosted by Peter Alexander sales

In earnings, fashion retail giant Premier Investments (ASX:PMV) unveiled its record interim dividend despite posting a 13 per cent fall in its net profit to $163.6 million for the 26 weeks ending 29 January this year. Its Peter Alexander brand clocked record sales in the 2022 fiscal year, buoying the performance of the conglomerate after 42,675 closed trading days due to government lockdowns. The owner of seven brands including Just Jeans, Peter Alexander, Smiggle, and Portmans recorded a revenue fall of 1.9 per cent to $770.3 million. The record dividend is up 35.3 per cent on the previous corresponding period to 46 cents per share and is set to be paid at the end of July. Shares are trading 0.9 per cent lower to $28.69.

Healius & Z Energy’s deals progressing

In M & A’s, Healius (ASX:HLS) has put up for sale its Adora Fertility and three co-located Healius Day Hospitals for $30.5 million. The binding deal is with Liverpool Partners for an all cash transaction with the settlement slated for the end of this financial year, subject to conditions. The move comes after the ACCC jumped in to prevent the $45 million bid by Virtus Health to acquire the business in October last year. Shares are trading 0.5 per cent lower to $4.25.

Shareholders in Z Energy (ASX:ZEL) voted in favour of the scheme of arrangement under which 100 per cent of the shares in the company will be acquired by Ampol Holdings NZ (ASX:ALD). The resolution was passed by the requisite majorities of shareholders of 75 per cent or more of the votes cast and more than 50 per cent of the total number of Z Energy shares on issue. Shares in Z Energy (ASX:ZEL) are trading 0.3 per cent lower to $3.47 while shares in Ampol Holdings (ASX:ALD) is down by a hairline, 0.07 per cent to $29.89.

Companies in trading halt

Several companies have gone into a trading halt including, Sequoia Financial (ASX:SEQ), Antilles Gold (ASX:AAU), Tietto Minerals (ASX:TIE).

In Asian markets, Japan’s Nikkei is off to a muted start dancing between losses and gains on the flat line.

SPI futures

At noon, the S&P/ASX 200 is 0.4 per cent or 32.4 points higher at 7,420.

The SPI futures are pointing to a rise of 38 points.

Best and worst performers

The best-performing sector is materials, up 1.2 per cent. The worst-performing sector is health care, down 0.7 per cent.

The best-performing stock in the S&P/ASX 200 is BlueScope Steel (ASX:BSL), trading 5.1 per cent higher at $21.46. It is followed by shares in AVZ Minerals (ASX:AVZ) and JB Hi-Fi (ASX:JBH).

The worst-performing stock in the S&P/ASX 200 is Telix Pharmaceutical (ASX:TLX), trading 12.9 per cent lower at $4.13. It is followed by shares in Block (ASX:SQ2) and Imugene (ASX:IMU).

Commodities and the dollar

Gold is trading at US$1962.61 an ounce.
Iron ore is 0.1 per cent lower at US$146.35 a ton.
Iron ore futures are pointing to a rise of 1.33 per cent.
One Australian dollar is buying 75.06 US cents.

Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.