Zip jumps 4% after abandoning merger with Sezzle: ASX up 0.3% at noon

Market Reports

by Melissa Darmawan

Healthcare stocks are lifting the Australian sharemarket, overshadowing the weakness in the materials and information technology sectors. Investors have eyed the start of earnings season ahead of the highly anticipated US inflation data while weighing up the outlook for China’s economy as new Covid-19 cases flare up.

At noon, the S&P/ASX 200 is 0.3 per cent or 17 points higher at 6,620. The SPI futures are pointing to a rise of 26 points.

US equities futures fell about 0.5 per cent after technology shares led a Wall Street slide, including a plunge in Twitter as Elon Musk walked away from his deal to buy the social-media giant. The US dollar experienced its biggest jump in a month to heights seen at the start of the pandemic, suggesting nervousness from investors, while treasuries extended gains both in the US and locally.

The mood feels defensive, with investors buying into CSL (ASX:CSL), up 2.4 per cent to $294.93, and Resmed (ASX:RMD), which rose 2 per cent to $32.28, propping up the healthcare sector.

Utilities stocks are also catching a bid, with AGL Energy (ASX:AGL), APA Group (ASX:APA) and Origin Energy (ASX:ORG) up by 0.4 to 1.5 per cent. Blackmores (ASX:BKL) is up 3.6 per cent to $78.29, while Coles (ASX:COL) and Woolworths (ASX:WOW) have added around 2 per cent, propping up the consumer staples sector. Gold miners, Northern Star (ASX:NST) and Evolution Mining (ASX:EVN) are up between 1.3 to 1.7 per cent.

The stocks leading the declines across materials, technology and communication services include Life360 (ASX:360), which is also the worst-performing stock on the ASX 200, down 8.2 per cent to $3.69, Square (ASX:SQ2), which has fallen 3.6 per cent to $92.90, BHP (ASX:BHP), which has lost 1 per cent to $37.58 and Telstra (ASX:TLS), which is trading 0.1 per cent lower at $3.88.

Meanwhile, coal miners are the standouts on the ASX 200, with New Hope Corporation (ASX:NHC) and Whitehaven Coal (ASX:WHC) the top two best-performing stocks and both adding over 4.4 per cent.

Local economic news

Consumer confidence fell for a second straight week by 2.5 per cent last week, following the 1.2 per cent decline in the previous week, according to ANZ and Roy Morgan. The results were attributed to concerns about both economic outlook and household finances.

Consumer sentiment fell 3 per cent to 83.8 in July, from 86.4 in June, weighed down by interest rate hikes and hot inflation, according to the Westpac Melbourne Institute.

Business conditions eased 2 points to 13 in June attributed to rising costs, according to National Australia Bank. The survey's measure of purchase costs rose to a record high of 4.8 per cent, while labour costs grew by 3.6 per cent at a quarterly pace.

Company news

Sports betting company Entain Group has awarded RAS Technology Holdings (ASX:RTH) a five year extension on their deal to provide racing content valued at $5 million in Australia. Shares are trading 1 per cent higher to 50.5 cents.

Sezzle (ASX:SZL) and Zip Co (ASX:ZIP) have mutually agreed to abandon the merger deal , effective immediately after signing it in February this year. Shares in Zip Co (ASX:ZIP) are trading 4 per cent higher to 52 cents while shares in Sezzle (ASX:SZL) are trading 31.3 per cent lower to 28.5 cents.

Centuria Industrial REIT (ASX:CIP) has completed external valuations on 41 investment properties, representing around 63 per cent of its portfolio value as at 30 June 2022. The remaining properties were subject to internal or director’s valuations. Shares are trading 0.7 per cent higher to $2.97. (ASX:MYD) has reported record gross sales of $272.2 million for the 2022 financial year which is up 24.8 per cent above guidance from the same time a year ago. Shares are trading 0.5 per cent higher to $1.03.

Viva Energy (ASX:VEA) has reported that total group sales volumes for the half year ending in June this year rose 5.2 per cent from a year earlier, attributed by strong diesel sales which exceeded pre-pandemic levels. Strong global demand for refined products, especially diesel, coupled with tightening supply from refinery closures, reduced exports from China and Russian oil sanctions, continued to drive stronger global refining margins through the second quarter. Shares are trading 1.8 per cent higher to $2.79.

Eagers Automotive (ASX:APE) expects a statutory net profit before tax from continuing operations for the six months ended June this year of $246 million, exceeding the profit guidance of $225 million to $240 million that was provided in May. Shares are trading 1 per cent higher to $10.66.

Commodities and the dollar

Gold is trading at US$1,732.37 an ounce.
Iron ore is flat at US$114.05 a ton.
Iron ore futures are pointing to a fall of 1.4 per cent.
One Australian dollar is buying 67.30 US cents.

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