Wage print prompt concerns on 40bp rise, Sayona soars 22% in 3 days: ASX up 0.7% at noon

Market Reports

by Melissa Darmawan

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Materials lift ASX higher for 4th day

Australian shares are on track to continue its winning streak for its fourth straight day after taking a strong lead from Wall St. The local index trimmed back from its 1.2 per cent jump prior to digesting the latest wage price index figures pointing to a 0.7 per cent rise in the March quarter and an annual growth to 2.4 per cent. The print is set to send a signal to the Reserve Bank of Australia to consider hiking the cash rate by 40 basis points in its June meeting.

At noon, the S&P/ASX 200 is 0.7 per cent or 53 points higher at 7,165,  hovering shy of 7,200, a level not seen since 6 May. The SPI futures are pointing to a rise of 37 points.

Aussie dollar firms up as 10-year bond yields dip on pay print

Economists were expecting a rise of 0.8 per cent and 2.5 per cent on year, following reading the minutes from the May meeting yesterday which showed that the central bank pondered on a 40 basis point hike before deciding to increase by 25 basis points.

In the almost broad-based rally, materials is taking charge with BHP (ASX:BHP) doing the heavy lifting by 3 per cent, followed by industrials, down 1.4 per cent, and property at 1.3 per cent. The only two sectors trading lower are consumer staples, down 0.6 per cent amid news from Wall St on Walmart's profit earnings. Financials have pivoted into the red by 0.3 per cent with Commonwealth Bank (ASX:CBA) weighing, by 1.1 per cent along with Zip Co (ASX:ZIP) down 1.6 per cent.

There are a few stock standouts, AnteoTech (ASX:ADO) is up 27.7 per cent to 12 cents on news that it has successfully registered an updated EuGeni Covid-19 rapid antigen test, Sayona Mining (ASX:SYA) continues to rally, it’s up over 22 per cent in the past three days, and Grange Resources (ASX:GRR) is up over 11 per cent in the last three days.

There are several companies consolidating, Bubs Australia (ASX:BUB) is trading 4.7 per cent lower to 41 cents after soaring over 16 per cent in the past three days, alongside Byron Energy (ASX:BYE), down 2.8 per cent to 18 cents after rallying 20 per cent in the same time frame and Centaurus Metals (ASX:CTM), down 2.5 per cent after advancing 16 per cent in the past three sessions.

What else is on watch?

In AGMs, Eagers Automotive (ASX:APE) has their annual meeting after doubling full year net income in their February update, while shares are down 6.1 per cent to $11.16. Telix Pharmaceuticals (ASX:TLX) is also on the docket, with shares up 1.5 per cent to $4.21.

In broker moves, Jefferies cut Commonwealth Bank (ASX:CBA) to hold with a price target of$114, with shares down 0.9 per cent to $104.18. Credit Suisse upgraded Oz Minerals (ASX:OZL) to neutral with a price target to $21, with shares up 3.3 per cent to $22.75. Credit Suisse rated Mineral Resources (ASX:MIN) as a new outperform with a price target of $73, with shares up 2.1 per cent to $59.35. Morgan Stanley upgraded James Hardie (ASX:JHX) to overweight, with shares up 2.5 per cent to $38.44. Bell Potter raised United Malt (ASX:UMG) to buy with a price target of $4.55, with shares up 1.3 per cent to $4.01.

AGL Energy (ASX:AGL) after JP Morgan organised a block trade for Mike Cannon Brookes for $467 million, according to the AFR. Shares are trading flat at $8.62 after it's jump yesterday.

Fortescue Group (ASX:FMG) is trading 0.8 per cent higher at $19.55 on news that Andrew Forrest will be appointed executive chairman , specifically overseeing the iron ore business for an interim period to help drive the company's transition when Elizabeth Gaines concludes her highly successful tenure in August.

Here is Lauren with the top headlines

Eagers Automotive (ASX:APE) warns an anticipated reduction in the number of new vehicles delivered to customers is expected to impact its half year financial performance. The automotive retailer related the issue to multiple global events, particularly the on-going effects of semiconductor shortages in the industry, as well as the conflict in Ukraine and China’s Covid lockdowns. Shares are down 6.1 per cent to $11.16.

Boral (ASX:BLD) expects to take a $45 million hit to its FY22 earnings due heavy rainfalls in NSW and Queensland, and higher energy prices. This comes after its update in March which stated expected earnings of between $145 and $155 million assuming no further rain events. Given the recent rainfalls and inflationary cost pressures, this hasn't been the case. Shares are down 3.4 per cent to $3.10.

EMVision Medical (ASX:EMV) has been awarded $5 million in funding under the Australian Federal Government’s modern manufacturing initiative. The grant aims to advance the company’s brain screening technology for stroke management, and will assist EMVision in establishing manufacturing capabilities at a commercial scale. Shares are up 6.4 per cent to $1.84.

BlueScope Steel (ASX:BSL) has increased its earnings guidance for the second half of the 2022 financial year thanks to strong steel prices and spreads in the US despite a softer Aussie chain. It now expects underlying EBIT to be between $1.375 billion to $1.475 billion, versus the prior guidance range of between $1.2 billion to $1.35 billion. Shares are trading 1.3 per cent higher at $18.17.

SRG Global (ASX:SRG) has secured a $95 million civil infrastructure contract with US-based industrial company Alcoa. SRG Global is a manufacturer for the automotive and commercial truck industries, and said it will provide services at Alcoa’s Kwinana Alumina Refinery in Western Australia. Shares are trading 5.9 per cent higher at $0.62.

Integral Diagnostics (ASX:IDX) has agreed to acquire NZ-based Horizon Radiology in order to expand its presence in the Auckland market. Integral will acquire Horizon for an up-front consideration of $27.4 million ( NZ$30.3 million) in cash. Shares are down 0.3 per cent to $3.68.

Worley (ASX:WOR) has been awarded a three-year engineering and procurement services contract by Shell to support five of its assets in the Gulf of Mexico. Shares are trading 1.1 per cent higher at $14.75.

Monash IVF Group (ASX:MVF) has entered into a binding sale agreement for the acquisition of Perth- and Cairns-based fertility services provider Pivet Medical Centre. Shares are trading 3 per cent higher at $1.09.

Metcash (ASX:MTS) has extended the term of its agreement to supply Drakes Supermarkets stores in Queensland for a further five years. Shares are trading 1 per cent lower at $4.66.

Best and worst performers

The best-performing sector is materials, up 2.2 per cent. The worst-performing sector is consumer staples, down 0.5 per cent.

The best-performing stock in the S&P/ASX 200 is Megaport (ASX:MP1), trading 5.7 per cent higher at $7.43. It is followed by shares in South32 (ASX:S32) and Champion Iron (ASX:CIA).

The worst-performing stock in the S&P/ASX 200 is Eagers Automotive (ASX:APE), trading 6.5 per cent lower at $11.12. It is followed by shares in Boral (ASX:BLD) and Sims (ASX:SGM).

Commodities and the dollar

Gold is trading at US$1811.88 an ounce.
Iron ore is 2.2 per cent higher at US$130.15 a ton.
Iron ore futures are pointing to a fall of 2.3 per cent.
One Australian dollar is buying 70.13 US cents.

Source: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, Australian Bureau of Statistics

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