Ramsay lifts health care sector, Rio Tinto falls on "challenging" quarter: ASX closes 0.1% higher

Market Reports

by Lauren Evans

The Australian sharemarket eased its gains in the afternoon session despite a strong start. Today’s gains were buoyed by the health care space, which led the market to finish a touch higher, but it wasn't enough to keep the ASX in rally mode as energy and mining stocks weighed on the index.

Shares in Ramsay Health Care (ASX:RHC) skyrocketed 24.2 per cent higher to $80 after it received a non-binding takeover bid from a consortium of financial investors led by KKR. Ramsay provided the consortium due diligence after it proposed to acquire all shares in Ramsay for $88 per share.

KKR's deal valued Ramsay at around $20 billion as per AFR. Goldman Sach said in a note that the deal comes in at a premium compared to its $12 billion market cap and $15 billion enterprise value. The news saw other health stocks rise, including Pro Medicus (ASX:PME), which rose 5.7 per cent to $51.86 as the second-best stock.

Travel stocks rose amid the easing of restrictions in NSW and Victoria, led by Corporate Travel (ASX:CTD), up 3.9 per cent to $25.42. Across its travel peers, Webjet (ASX:WEB) rose 2.4 per cent to $5.95, Flight Centre (ASX:FLT) lifted 2.2 per cent to $21.84, and Qantas (ASX:QAN) closed 0.6 per cent higher at $5.42.

Major banks closed higher, besides Westpac (ASX:WBC), which fell 0.2 per cent to $24.36. ANZ (ASX:ANZ) led the pack, up 0.6 per cent to $27.91, followed by Macquarie (ASX:MQG), up 0.5 per cent to $206.67 after KKR targeted its India road assets. Commonwealth (ASX:CBA) lifted 0.2 per cent to $107.24 and National Australia Bank (ASX:NAB) closed 0.1 per cent higher at $33.27.

Heavyweight miners sank as Rio Tinto (ASX:RIO) noted a “challenging” first quarter while it works on operational performance and workplace culture. The iron ore miner produced 71.7 million tonnes of iron ore over the quarter, down 6 per cent from the prior year period. It said full year production guidance between 320 million and 335 million tonnes remains unchanged. Shares were down 2.8 per cent to $118.30, while BHP (ASX:BHP) fell 1.6 per cent to $52.30 and Fortescue Metals (ASX:FMG) closed 0.2 per cent lower at $21.68.

Gold stocks were also under pressure, with Evolution Mining (ASX:EVN) down 2.6 per cent to $4.56 and Northern Star (ASX:NST) down 2 per cent to $11.25.

Energy stocks erased their gains from yesterday, with Santos (ASX:STO) down 1.1 per cent to $8.23 following its announcement of an on-market share buyback of up to $338 million (US$250 million) as part of a new capital management framework. Meanwhile, Woodside Petroleum (ASX:WPL) fell 0.7 per cent to $32.68 and Beach Energy (ASX:BPT) closed 0.3 per cent lower at $1.66.

At the closing bell, the S&P/ASX 200 was 0.1 per cent or 4 points higher at 7,569.

Local economic news

ANZ and Roy Morgan’s weekly consumer confidence increased by 2.2 points to 96.8 this week after average petrol prices in Australia dropped by another 8 cents per litre last week, and are now down over 46 cents per litre to $1.66 per litre last week since peaking in mid-March at $2.13 per litre.

Consumer confidence has now increased for three straight weeks, however it is still a significant 17.2 points below the same week a year ago, April 17/18, 2021 (114.0) and is now just below the 2022 weekly average of 98.2. Consumer confidence was up in most states this week including New South Wales, Victoria, Western Australia and South Australia.

Company news

Whitehaven Coal (ASX:WHC) is on track to deliver its FY22 guidance despite wet weather events and Covid-19 disruptions. During the March quarter, the coal miner’s managed run-of-mine production of 5.2Mt fell 5 per cent from the prior year period, while it achieved an average coal price of $315/t, up 212 per cent following the global response to Russia’s invasion of Ukraine. Shares closed 2.8 per cent higher at $4.79.

Nearmap (ASX:NEA) said it achieved a record quarter from its government portfolio in North America, having exceeded more than US$2 million in incremental annual contract value. CEO Rob Newman said, “Nearmap is attracting new business in North America at a record pace”. It also reaffirmed guidance for its annualised contract sales value to close FY22 at the upper end of the $150 million to $160 million guidance range. Shares closed 2.2 per cent lower at $1.36.

Atlas Arteria (ASX:ALX) reported an increase in toll revenue and traffic statistics for the March quarter.The toll operator said weighted-average traffic was 24.4 per cent higher than the prior year period, and 0.9 per cent higher than 2019. Weighted-average toll revenue was 22.1 per cent higher than the prior year period, and 3.3 per cent higher than 2019. Shares closed 0.2 per cent lower at $6.79.

Bega Cheese (ASX:BGA) said it expects full year direct costs related to Covid-19 to be at least $40 million, despite restrictions easing during the March quarter. The Aussie food brand also said they are now managing costs and supply chain impacts from the recent flooding in Central Australia, Northern NSW and Queensland. Shares closed 0.6 per cent higher at $5.17.

What else was noted today?

Sequoia (ASX:SEQ) initiated coverage for Betmakers (ASX:BET) with a price target of 77 cents. Shares last traded at $0.64.

Morningstar cut three companies ratings from a hold to a sell. These were APA Group (ASX:APA), which 1.3 per cent higher at $11.24, Atlas Arteria (ASX:ALX), which closed 0.2 per cent lower at $6.79, and Flight Centre (ASX:FLT), which closed 2.2 per cent higher at $21.84

Futures

The Dow Jones futures are pointing to a fall of 68 points.
The S&P 500 futures are pointing to a fall of 20 points.
The Nasdaq futures are pointing to a fall of 130 points.
The SPI futures are pointing to a rise of 4 points when the market next opens.

Best and worst performers

The best-performing sector was Health Care, up 2.6 per cent. The worst-performing sector was Materials, down 1.5 per cent.

The best-performing stock in the S&P/ASX 200 was Ramsay Health Care (ASX:RHC), closing 24.2 per cent higher at $80.00. It was followed by shares in Pro Medicus (ASX:PME) and United Malt Group (ASX:UMG).

The worst-performing stock in the S&P/ASX 200 was HUB24 (ASX:HUB), closing 6.5 per cent lower at $24.28. It was followed by shares in Regis Resources (ASX:RRL) and Paladin Energy (ASX:PDN).

Asian markets

Japan's Nikkei has gained 0.9 per cent.
Hong Kong's Hang Seng has lost 0.3 per cent.
China's Shanghai Composite has lost 1.3 per cent.

Commodities and the dollar

Gold is trading at US$1940.49 an ounce.
Iron ore is 2.6 per cent lower at US$149.85 a ton.
Iron ore futures are pointing to a fall of 1.8 per cent.
Light crude is trading $0.68 higher at US$102.73 a barrel.
One Australian dollar is buying 74.17 US cents. 

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