China's economy slumps in April: ASX closes 0.3% higher

Market Reports

by Lauren Evans

Australian shares struggled to maintain their early morning rally after China revealed that it had suffered an 11.1 per cent drop in retail sales during April, which was worse than expected. This was a result of China’s harsh Covid-19 lockdowns. Given that China is Australia's biggest trading partner, a slowdown could have a significant impact on the local economy.

The local index still finished higher, which meant a two-day winning streak for the first time this month. At the closing bell, the S&P/ASX 200 was 0.3 per cent or 18 points higher at 7,093.

Industrials were the winning sector, up 2.4 per cent, followed by technology, up 2.1 per cent, then communication services. Healthcare lost the most points, with materials and consumer discretionary also in the red.

Who were the winners?

Brambles (ASX:BXB) was the top performer, up 11.2 per cent to $11.60 after confirming that it had spoken to private equity group CVC Capital Partners about a potential takeover deal. However, the logistics company said it has not received a formal proposal from CVC. Another logistics company, Qube (ASX:QUB), jumped 5.4 per cent to $2.93 after completing a $400 million buy-back.

InfoMedia (ASX:IFM) soared 28.5 per cent to $1.64 after it revealed a $1.70 per share takeover bid from Viburnum Funds late on Friday.

Mining tech company Chrysos Corp (ASX:C79) rose 9.1 per cent to $4.69 after signing five new leasing contracts, bringing the total number of units to 38. This was positive news given that we saw a horror show on Chrysos’ first day on the market, losing more than a third of its value after its $183.5 million listing at $6.50 a share.

Galileo Mining (ASX:GAL) soared 58.3 per cent to $0.86 after one of the company’s major shareholders Mark Creasy increased his stake by $3 million shares.

What stocks were under pressure?

Shares in underwear manufacturer Step One (ASX:STP) tumbled 56.3 per cent to $0.21 after the group warned sales in the UK and US were slower than expected. It slashed pro-forma prospectus EBITDA guidance from $15.1 million to between $7 million and $8.5 million.

4DMedical (ASX:4DX) fell 4 per cent to $0.72 after its XV Lung Ventilation Analysis Software was found to be capable of assessing regional ventilation defects in patients with chronic obstructive pulmonary disease.

Weighting on the biotech sector was Imugene (ASX:IMU), closing 5.7 per cent lower at $0.17 despite no news today.

Let's look at major banks & commodities

Macquarie Group (ASX:MQG) tumbled 1.9 per cent to $179.66 after trading without the right to its dividend. Despite this, Westpac (ASX:WBC) led the other major banks higher, up 1.6 per cent to $24.38.

Santos (ASX:STO) led the energy circle, up 0.5 per cent to $8.09 and Northern Star (ASX:NST) led gold, up 1.3 per cent to $8.64.

Fortescue Metals Group (ASX:FMG) weighed on iron ore players, down 2.2 per cent to $18.96, followed by BHP Group (ASX:BHP), down 1.2 per cent to $45.31.

What else was on watch?

Perseus Mining (ASX:PRU) had its general meeting today, while shares fell 1.2 per cent to $1.69.

In broker moves, JP Morgan initiated coverage of Endeavour Group (ASX:EDV) to overweight with a price target of $8.60, with shares up 2.1 per cent to $7.75.

Jarden upgraded Corporate Travel Management (ASX:CTD) to a buy from overweight to $20.58, citing recent fall in share price, with shares up 3.6 per cent to $21.32.

Perpetual (ASX:PPT) was on speculation of a potential buyout of Australian Equity Trustee business, according to The Australian. Shares closed 0.4 per cent higher at $32.58.

Other headlines

Goodman Group (ASX:GMG) confirmed its FY22 guidance despite Covid-19 challenges and global geopolitical tensions.The property giant confirmed operating earnings per share growth of 23 per cent, and a full year distribution of 30 cents per share. Shares closed 0.4 per cent lower at $19.58.

Calix (ASX:CXL) and Boral (ASX:BLD) have secured $30 million in government funding under the government’s Carbon Capture, Use and Storage Hubs and Technologies Program. Shares in Calix rose 1.1 per cent to $6.65, while shares in Boral closed 0.2 per cent higher at $3.28.

Cooper Energy (ASX:COE) revised its F22 guidance with underlying EBITDAX revised upwards from the previous guidance. Production was narrowed to the upper end of the previous guidance, sales were narrowed and capital expenditure was revised lower. Shares jumped 3.8 per cent to $0.28.

Auckland Airport’s (ASX:AIA) total number of passengers fell during March despite a jump in international passengers. Total passengers during April increased by 4.2 per cent versus April 2021. April was a better month, but it was similar to March. Shares rose 0.9 per cent to $6.68.

Futures

The Dow Jones futures are pointing to a fall of 141 points.
The S&P 500 futures are pointing to a fall of 21 points.
The Nasdaq futures are pointing to a fall of 75 points.
The SPI futures are pointing to a rise of 30 points when the market next opens.

Best and worst performers

The best-performing sector was Industrials, up 2.4 per cent. The worst-performing sector was Health Care, down 0.6 per cent.

The best-performing stock in the S&P/ASX 200 was Brambles (ASX:BXB), closing 11.2 per cent higher at $11.60. It was followed by shares in Qube Holdings (ASX:QUB) and Pilbara Minerals (ASX:PLS).

The worst-performing stock in the S&P/ASX 200 was Imugene (ASX:IMU), closing 5.7 per cent lower at $0.17. It was followed by shares in City Chic Collective (ASX:CCX) and Zip Co (ASX:ZIP).

Asian markets

Japan's Nikkei has gained 0.5 per cent.
Hong Kong's Hang Seng has gained 0.3 per cent.
China's Shanghai Composite has lost 0.3 per cent.

Commodities and the dollar

Gold is trading at US$1805.39 an ounce.
Iron ore is 0.2 per cent lower at US$127.35 a ton.
Iron ore futures are pointing to a rise of 0.8 per cent.
Light crude is trading $1.32 lower at US$96.53 a barrel.
One Australian dollar is buying 68.86 US cents.
 

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