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7-Up for Aussie market

Daily Market Update

The Australian sharemarket climbed for a seventh consecutive session on Tuesday, its longest winning streak since June, led by sharp gains across growth stocks.

The benchmark S&P/ASX 200 index added 21.8 points, or 0.3 per cent, to 7600.2 at the closing bell, with seven out of the 11 sectors finishing in the green. The All Ordinaries edged up 0.3 per cent.

The gauge briefly rose above its record close in August 2021 to touch 7629.8 at 11:33 am AEDT on Tuesday before paring gains. It’s yet to breach an intraday record of 7632.8 that was also set in 2021.

  • On the ASX, the technology sector was the best performer, climbing 1.9 per cent. Cloud connectivity provider Megaport was the star, surging $2.70, or 27.6 per cent, to $12.48 after reporting in its latest quarterly trading update that revenue increased 5 per cent to $48.6 million. Second-quarter EBITDA (earnings before interest, tax, depreciation and amortisation) of $15.1 million was well above market expectations of about $11.3 million. Also boosting the sector were Xero, which rose $1.77, or 1.6 per cent, to $110.98; WiseTech, which added 90 cents, or 1.3 per cent, to $72.30; and NextDC, which appreciated 18 cents, or 1.3 per cent, to $13.86.

    Healthcare stocks were also generally stronger, with the sector index putting on 1.1 per cent. ResMed was up 51 cents, or 1.8 per cent, to $28.95; CSL firmed $3.48, or 1.2 per cent, to $296.74; and Sonic Healthcare gained 37 cents, or 1.2 per cent, to $32.17.

    Among the big banks, Westpac softened 11 cents, or 0.5 per cent, to $23.82; ANZ shed 6 cents, or 0.2 per cent, to $26.79; and National Australia Bank gave up 1 cent to $32.13; but Commonwealth Bank gained 13 cents, to $116.05.

    Women’s specialty plus-size fashion retailer City Chic jumped 11.5 cents, or 26.4 per cent, to 55 cents after seeming to confirm – without concretely confirming – that overseas buyers have been looking very closely at the company’s North American operations. 

    Domino’s Pizza continues its attempted recovery from last Thursday’s calamitous 30%-plus plunge last Thursday, after rescinding its existing earnings guidance; the fast-food heavyweight accrued $1.47, or 3.7 per cent, to $41.40.

    Toll roads operator Atlas Arteria gained 12 cents, or 2.3 per cent, to $5.47, after reporting a 5.9 per cent increase in toll revenue for the December quarter, on the back of price increases and strong traffic on its most profitable toll road asset, the APPR motorway in France.

    Nickel back, at least for NIC shareholders

    While Australia’s nickel industry struggles in the face of cheaper competition, Indonesian-based producer Nickel Industries showered its shareholders with goodies including an increased dividend and share buyback, on the back of record production and earnings from its Indonesian mines and nickel processing assets in the December quarter, despite weaker nickel prices. NIC surged 12.5 cents, or 20.8 per cent, to 72.5 cents.

    Among the bulk miners, BHP advanced 18 cents, or 0.4 per cent, to $47.05; Rio Tinto lifted 64 cents, or 0.5 per cent, to $132.46; and Fortescue put on 45 cents, or 1.5 per cent, to $29.70.

    Copper miner Sandfire Resources rose 26 cents, or 3.8 per cent, to $7.12 after it posted unaudited sales revenue at $217 million, according to its latest quarterly trading update. The company recorded $84 million in underlying operations earnings before interest tax and amortisation during the December quarter.

    In coal, Whitehaven Coal lost 11 cents, or 1.3 per cent, to $8.26; New Hope Corporation slipped 7 cents, or 1.3 per cent, to $5.26: Stanmore Resources was up 4 cents, or 1 per cent, to $3.95; Coronado Global Resources retreated 4.5 cents, or 2.7 per cent, to $1.615; and Yancoal Australia eased 3 cents, or 0.5 per cent, to $5.89.

    In gold, Gold Road Resources surged 14 cents, or 10 per cent, to $1.535, after its 18.4 per cent fall on Monday; Northern Star Resources was up 38 cents, or 2.9 per cent, to $13.33; Ramelius Resources strengthened 4.5 cents, also 2.9 per cent, to $1.58; Genesis Minerals advanced 4.5 cents, up 2.9 per cent to $1.60; De Grey Mining closed 3 cents, or 2.6 per cent, higher at $1.20; Evolution Mining rose 5 cents, or 1.6 per cent, to $3.19; and Capricorn Metals added 7 cents, or 1.5 per cent, to $4.63.

    In lithium, producer Arcadium surged 43 cents, or 5.6 per cent, to $8.10; fellow producer Pilbara Minerals was unchanged at $3.60; Mineral Resources, which mines iron ore and lithium, gained $1.00, or 1.7 per cent, to $60.84; and IGO, which produces nickel as well as lithium, firmed 13 cents, or 1.7 per cent, to $7.73. Project developer Liontown Resources jumped 7 cents, or 7.3 per cent, to $1.025, as the market continues to speculate on Gina Rinehart’s Hancock Prospecting’s stake in the smaller company. Earlier this month, Liontown confirmed that the Kathleen Valley lithium project remains on-track for first production in the middle of 2024.

    Rates, earnings on Wall Street’s mind

    In the US, the looming Federal Reserve meeting – and the interest rates decision that will come out of it – is hanging over the share market, although the Fed Funds futures market has priced in a 97 per cent probability that the central bank will leave rates unchanged. The market is also dealing with quarterly earnings season, with the inevitable mix of beats and misses: for example, General Motors jumped nearly 8 per cent after the automaker posted better-than-expected earnings, but Alphabet shares slid on disappointing ad revenue for Google.

    The benchmark S&P 500 index eased 2.96 points, to 4,924.97, while the 30-stock Dow Jones Industrial Average elevated 133.86 points (0.4 per cent) to 38,467.31 and the tech-laden Nasdaq Composite Index retreated 118.15 points, or 0.8 per cent, to 15,509.90.

    On the bond market, the US 10-year yield eroded by 4.5 basis points, to 4.034 per cent, while the 2-year yield was very slightly higher, at 4.332 per cent.

    Gold is trading US$5.55, or 0.3 per cent, higher at US$2,036.84 an ounce; the global benchmark Brent crude oil grade gained 35 cents, or 0.4 per cent, to US$82.75 a barrel, and West Texas Intermediate oil lifted one dollar, or 1.3 per cent, to US$77.78 a barrel.

    The Australian dollar is buying 66.01 US cents this morning, down from 66.16 US cents at the ASX close on Tuesday.

    James Dunn

    James is an experienced senior journalist and host of The Inside Network's industry events.

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