ASX falls 0.5% at noon after wage growth forecasts miss targets

Market Reports

by Peter Milios

Underwhelming wage growth and disappointing results from US markets caused the S&P/ASX 200 to sink 0.49 per cent lower to 7,300.20 at noon.

In the December quarter, Australia's wage price index increased by 0.8 per cent, falling short of the expected 1 per cent increase. However, the annual pay rate rose to 3.3 per cent, which was slightly lower than the anticipated 3.5 per cent gain.

Despite the fall in the markets, Utilities is surging 4.4 per cent higher. This is on the back of today’s announcement for Origin Energy (ASX:ORG). A consortium comprising Brookfield Asset Management, together with its affiliates and their managed funds, and MidOcean Energy, an LNG company formed and managed by EIG, is proposing the acquisition of all the issued shares in Origin by way of a scheme of arrangement at a price of $9.00 cash per share.

The SPI futures are pointing to a fall of 15 points.

Best and worst performers

The best-performing sector is Utilities, up 4.42 per cent. The worst-performing sector is Consumer Discretionary, down 1.87 per cent.

The best-performing large cap is Origin Energy (ASX:ORG), trading 12.70 per cent higher at $7.90. It is followed by shares in Santos (ASX:STO) and Infratil (ASX:IFT).

The worst-performing large cap is Domino's Pizza Enterprises (ASX:DMP), trading 19.83 per cent lower at $57.21. It is followed by shares in Spark New Zealand (ASX:SPK) and Reece (ASX:REH).

Asian markets

Asia-Pacific markets were lower on Wednesday ahead of key economic data across the region.

Japan’s Nikkei 225 fell 0.7 per cent as investors further digested the nation’s producer price index that rose 1.6 per cent on an annualized basis. The Topix fell 0.6 per cent. In South Korea, the Kospi fell 1 per cent and the Kosdaq also fell 1.2 per cent.

Hong Kong’s budget will be delivered later today by financial secretary Paul Chan, which also will include its GDP figures for 2022.

Company news

Vintage Energy (ASX:VEN) has announced that their gas supply from the Vali gas field commenced yesterday. Vali is supplying gas to eastern Australia under a long-term gas supply agreement with AGL Energy (ASX: AGL). “Our expectation is Vali, and the Odin gas field nearby, will be supplying gas to eastern Australia for many years” - Neil Gibbins, Managing Director, Vintage Energy. Shares are trading 2.2 per cent higher at 9.3 cents at noon.

Mandrake Resources (ASX:MAN) has secured a large-scale lithium project in the United States. In response, Managing Director James Allchurch commented: “Mandrake has organically secured a potentially world-class lithium project in the heart of the US, at a time when the US federal government is actively funding and supporting domestic sources of strategic and critical materials such as lithium.” Shares are trading 15.1 per cent higher at 6.1 cents at noon.

Charger Metals (ASX:CHR) has confirmed high-grade lithium at the Medcalf Spodumene Discovery. Charger’s Managing Director, David Crook, commented: “The first very encouraging drilling results are now to hand and drilling is continuing to intersect similar multiple-sheet pegmatites within a plunging, 100m-wide, structural zone.” Shares are trading 15.5 per cent higher at 43 cents at noon.

Carnarvon Energy (ASX:CVN) has entered into a binding agreement to divest a 10 per cent interest in its Bedout assets to OPIC Australia Pty Limited, a subsidiary of CPC, which is Taiwan’s national oil and gas company. In response, Carnarvon Managing Director and CEO, Adrian Cook, commented: “Carnarvon will be in the enviable position of holding substantial cash and financial liquidity to fund its share of the world class Dorado development.” Shares are trading 11.3 per cent higher at 17.3 cents at noon.

Commodities and the dollar

Gold is trading at US$1782.70 an ounce.
Iron ore is 1.8 per cent higher at US$131.85 a tonne.
Iron ore futures are pointing to a 0.05 per cent rise.
One Australian dollar is buying 68.54 US cents.

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