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Energy stocks weigh on ASX, as Star soars
By Jessica Yun
Welcome to your five-minute recap of the trading day, and how experts saw it.
The numbers
Energy stocks sent the Australian sharemarket lower on Friday, following a lacklustre performance on Wall Street overnight during which stocks swung after the latest US inflation update.
The S&P/ASX 200 fell 0.2 per cent or 17.3 points to 7340.1 points, which meant the bourse ended the week in a similar position to where it started.
Star Entertainment’s shares rocketed 18 per cent on Friday.Credit: Brent Lewin
The lifters
The best performer all day was Star Entertainment, skyrocketing 18 per cent as investors digested the news that NSW Treasurer Daniel Mookhey will defer the full implementation of poker machine duty rates in casinos until the end of the decade. Mookhey on Friday announced a revised, “transitional” arrangement for the planned duty rate increase on poker machine profits. The announcement confirmed this masthead’s story on Thursday.
Syrah Resources rose 10.6 per cent and AMP lifted 8.3 per cent.
The laggards
The energy sector was a poor performer, with Woodside falling 2 per cent and Whitehaven Coal dropping 3 per cent. Lithium producer Lake Resources stayed at the bottom of the bourse all day, sliding 7.1 per cent, while New Hope Corporation and Sayona Mining declined 3.7 and 3.6 per cent respectively. Market heavyweights Rio Tinto and BHP also weighed down the index, closing 0.6 and 0.1 per cent lower.
The lowdown
It was another busy day on the markets with retailers Baby Bunting, Nick Scali, News Corp and REA Group all revealing their results.
Nick Scali gained 13.3 per cent after revealing it made a net profit after tax of $101.1 million, up 26.1 per cent, for the 2023 financial year. Revenue was up by 15 per cent to $507.7 million. Baby Bunting’s share price slid 1.9 per cent after recording a profit of $9.9 million, a 49.5 per cent drop in net profit after tax for the financial year.
Pockets of strength across Australia’s retail sector have been on show, with fashion and furniture retailers surprising the market with stronger than expected results despite many consumers tightening their purse strings.
Meanwhile, AGL declined 0.6 per cent, as major shareholder Mike Cannon-Brookes said the Australian power giant released more climate-polluting greenhouse gas emissions into the atmosphere than some individual nations.
Shares in Rupert Murdoch’s News Corporation lifted 2.6 per cent higher even though News Corp Australia’s fourth-quarter revenue fell by 15 per cent. The company said the drop was affected by lower print and digital advertising. Revenue for the Australian division, which houses titles including The Australian, The Daily Telegraph and the Herald Sun, was also down 8 per cent across the fiscal year.
Wall Street jumped higher on the inflation report but pared its gains in the afternoon. Credit: AP
Overnight, the S&P 500 edged up by less than 0.1 per cent. It was just the second winning day for the index in the past eight, but it had been up 1.3 per cent in the morning before wobbling between small gains and losses.
The Dow Jones gained 0.2 per cent after giving up most of a strong morning gain. The Nasdaq composite added 0.1 per cent.
Thursday’s highly anticipated report showed US consumers paid prices that were 3.2 per cent higher in July than a year earlier. That’s a touch milder than the 3.3 per cent inflation rate economists expected to see and down sharply from last summer’s peak above 9 per cent. Beneath the surface, underlying trends for inflation were also within expectations.
The readings bolstered hopes among investors that the Federal Reserve’s campaign to grind down inflation is progressing and that maybe it could even be done hiking interest rates. High rates undercut inflation by slowing the entire economy and hurting investment prices, which raise the risk of a recession.
Treasury yields held relatively steady in the bond market after a report showed slightly more workers applied for unemployment benefits last week than expected. The number remains low compared with history, signalling the job market remains remarkably resilient despite much higher interest rates.
Fed officials would likely welcome some softening of the job market, which they would see as removing upward pressure on inflation.
Big US companies, meanwhile, continue to report mostly better profits for the spring than analysts expected. That’s usually the case, and analysts had particularly low expectations coming into this reporting season. Higher costs for workers and other expenses are broadly eating into profit margins.
Tweet of the day
Quote of the day
“AGL is one of the most toxic companies on the planet. It has more emissions than the entire country of Portugal, or the entire country of New Zealand – think of every single thing in New Zealand, every car, every business, every factory, every sheep ... and it’s eminently fixable.”
That’s Atlassian co-founder and major AGL shareholder Mike Cannon-Brookes today on Friday at a business forum in Sydney hosted by the Australian Institute of Company Directors.
IG Market’s list of most traded shares in the month to July 31.
You may have missed
Diggers and Dealers is an annual event that this year attracted up to 2700 miners, riggers, surveyors, drillers, heavy machinery makers, financiers and other mining industry types.
This year the forum, once dominated by gold miners and nickel prospectors, was awash with lithium and critical minerals companies – heralding a lithium “gold rush”.
It’s why star lithium miner Liontown Resources’ shares have been on a tear, hitting $2.74 this week, a 9000 per cent increase over five years.
AP
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