Energy & materials rise, GrainCorp upgrades FY22 guidance: ASX up 0.6% at noon

Market Reports

by Lauren Evans

The Aussie sharemarket has advanced this morning following a recovery on Wall Street. Across the local bourse, energy and materials are leading today’s gains, while technology and utilities are the only two sectors trading lower.

Energy stocks are in the spotlight today after oil prices settled higher. Woodside Petroleum (ASX:WPL) is up almost 3 per cent for the week, and trading 0.8 per cent higher at $33.15. Santos (ASX:STO) is up 0.9 per cent to $7.98 and Beach Energy (ASX:BPT) is up 0.7 per cent to $1.56, while Paladin Energy (ASX:PDN) is the top performer, trading 11.3 per cent higher at $0.89.

Heavyweight miners are performing well. Rio Tinto (ASX:RIO) has taken full control of an alumina refinery it owns with United Co. Rusal International PJSC in Australia, formally removing access to a key source of raw material for the Russian aluminium giant, according to Bloomberg. Shares in Rio Tinto (ASX:RIO) are trading 0.9 per cent higher at $119.79, while Fortescue Metals (ASX:FMG) has added 1.5 per cent to $22.07 and BHP (ASX:BHP) is trading 1.5 per cent higher at $51.84.

Gold stocks are adding to today’s gains, led by Northern Star (ASX:NST) up 2.1 per cent to $10.36. Newcrest Mining (ASX:NCM) has risen 1.8 per cent to $27.29 and Evolution Mining (ASX:EVN) is trading 1.7 per cent higher at $4.30.

Major banks are lifting higher, led by ANZ Banking (ASX:ANZ) up 0.5 per cent to $27.48. Commonwealth (ASX:CBA) is edging 0.1 per cent higher to $105.34, Westpac (ASX:WBC) is up 0.1 per cent to $24.14, Macquarie (ASX:MQG) is up 0.2 per cent to $202.48 and National Australia Bank (ASX:NAB) is trading 0.2 per cent higher at $32.52.

Elsewhere, global demand for Australian grain and oilseeds has led GrainCorp (ASX:GNC) to upgrade its earnings guidance for the 2022 financial year. The conflict in Ukraine has created uncertainty in global grain markets, with buyers looking for alternate sources of supply. Meanwhile, the recent weather patterns have also provided favourable planting conditions for the upcoming East Coast Australian winter crop. GrainCorp now expects FY22 net profit after tax to be between $310 to $370 million from the previous $235 to $280 million. Shares are trading 5.7 per cent higher at $9.18, and is the second-best stock.

At noon, the S&P/ASX 200 is 0.6 per cent or 42.3 points higher at 7485.10.

The SPI futures are pointing to a rise of 39 points

What else are we looking at?

On the economic data front, the Australian Bureau of Statistics released its monthly business turnover indicator report for February. The indicator showed a rise in business turnover for all 13 of the published industries. The largest rises were in transport, postal and warehousing (9.3 per cent), arts and recreation services (8 per cent) and construction (7.4 per cent). Through the year, the largest rises were recorded in mining (35.1 per cent) followed by transport, postal and warehousing (31.5 per cent).

Also, the Reserve Bank released its bi-annual financial stability review report. According to the review, financial systems remain resilient but face higher volatility and uncertainty, rising inflation and interest rates will make it difficult for some borrowers to meet debt payments, large falls in property or financial asset prices would be disruptive for financial markets and the economy, and the risks of cyber-attacks have increased for banks and other financial institutions.

Meanwhile, annual general meetings are on deck for OZ Minerals (ASX:OZL) and Rio Tinto (ASX:RIO), while GUD Holdings (ASX:GUD) is set to host its investor day. OZ Minerals (ASX:OZL) is up 0.2 per cent to $25.58 and Rio Tinto (ASX:RIO) is up 0.9 per cent to $119.79, while GUD Holdings (ASX:GUD) is trading 2.7 per cent higher at $11.79.

In broker moves, Ord Minnett rates CSL (ASX:CSL) as an accumulator with a target price of $295. The blood collecting giant’s latest data on plasma collections flag that volumes continue to move higher despite low staff and donor challenges. The rate of recovery remains challenging, although the broker is confident CSL’s recovery is ahead of the industry, supported by its centre opening strategy. CSL remains the broker’s key preference in the healthcare sector given the strong earnings growth expected in financial year 2023 and financial year 2024, supported by a recovery in plasma collections and benefits from the Vifor acquisition. Shares are trading 0.2 per cent higher at $267.00.

CIMIC Group (ASX:CIM) will be removed from the ASX 200 and replaced with HomeCo Daily Needs REIT (ASX:HDN) as per S&P Global, as a result of the board approved, off-market takeover offer from HOCHTIEF Australia Holdings. Shares in CIMIC (ASX:CIM) are trading flat at $22, while shares in HomeCo Daily Needs REIT (ASX:HDN) are trading 1.1 per cent higher at $1.51.

Company news

Chorus (ASX:CNU) has announced two executive changes today. Its current director Mark Cross will take over Patrick Strange as chairman, when Dr Strange stands down in October. Mr Cross is currently chair of Milford Asset Management and will retire from there on July 1. Meanwhile, its chief financial officer David Collins has resigned and plans to return to Australia later in the year following Atlas Ateria’s (ASX:ALX) announcement which appoints Mr Collins as its new CFO. Shares in Chorus (ASX:CNU) are trading 0.3 per cent higher at $6.80.

Pro Medicus (ASX:PME) said its US subsidiary Visage Imaging has signed a $32 million contract with Inova Health System, a nonprofit healthcare provider in Northern Virginia. The 8-year contract will see the company’s Visage 7 enterprise imaging platform implemented throughout Inova and Fairfax Radiology. It said planning for the rollout will commence immediately. Shares are trading 2.5 per cent higher at $48.39.

Waypoint REIT’s (ASX:WPR) chief financial officer Kerri Leech has resigned from the company to pursue another career opportunity. Chief executive officer Hadyn Stephens noted the contribution that Ms Leech has made since joining in early 2020. Shares are trading 0.6 per cent higher at $2.72.

Best and worst performers

The best-performing sector is energy, up 1.2 per cent. The worst-performing sector is utilities, down 0.3 per cent.

The best-performing stock in the S&P/ASX 200 is Paladin Energy (ASX:PDN), trading 11.3 per cent higher at $0.89. It is followed by shares in GrainCorp (ASX:GNC) and Nufarm (ASX:NUF).

The worst-performing stock in the S&P/ASX 200 is Platinum Asset Management (ASX:PTM), trading 15.7 per cent lower at $1.88. It is followed by shares in Tyro Payments (ASX:TYR) and IGO (ASX:IGO).

Commodities and the dollar

Gold is trading at US$1932.51 an ounce.
Iron ore is 3.2 per cent lower at US$155.05 a ton.
Iron ore futures are pointing to a rise of 0.93 per cent.
One Australian dollar is buying 74.83 US cents.

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