ASX lifts a touch to overcome tech losses

ASX delivers small gain, Future Fund leads renewables deal 

The ASX200 (ASX:XJO) finished slightly higher, adding 0.1% to commence the week. 

The IT sector continues to feel a great deal of selling pressure with Afterpay (ASX:APT) falling another 4.5% as investors continue to pivot towards more sustainable, undervalued sources of returns. The share price is now nearly 30% off its recent highs.

Healthcare and financials lead the way with the major banks gaining modestly, the National Australia Bank (ASX:NAB) up 0.2% on the back of the RBA Governor’s latest speech.

Speaking in Melbourne today, he surprised delegates by suggesting the economic recovery has been quicker and stronger than expected but flagged that ‘this does not hide the fact that we still have a long way to go’.

It would seem the markets are starting to get the message being put to them by central banks.

Healthcare and energy were the other winners, the former up 1.0% behind CSL (ASX:CSL) and Ramsay Healthcare (ASX:RHC) which added 3.2% as lockdowns in Europe continue to be removed.

Broker Morgan Stanley has flagged caution towards the recent recovery in travel stocks, pointing out that enthusiasm for vaccines and the opening of domestic borders may have sent shares in Flight Centre (ASX:FLT) up too fast too soon.

Tilt Renewables auction complete, Fortescue outlines 2030 plans

The biggest news of the day was the acquisition of the massive Tilt Renewables wind farm and associated projects by a consortium of Australian investing.

Under the guide of PowAR, shortened from Powering Australian Renewables, a group of investors including AGL Energy (ASX:AGL), the Future Fund, and the Queensland Investment Corporation (QIC) have won the auction for the 836 MW hours of wind projects owned by NZ-based Tilt Renewables.

The deal values the portfolio of assets at $2.7 billion, with the NZ projects to be retained by Mercury Energy.

The auction comes just a few months after Australian Super lobbed an unexpected bid for ASX-listed Infratil (ASX:IFT) which owns 65.5% of the company.

The purchase is a sign of things to come in the clean energy sector, with investors increasingly attracted to the pipeline of potential projects, not just the operational assets.

Shares in NZ Government-owned Meridian Energy (ASX:MEZ) jumped 3.8% on the news.

Sticking with energy, Andrew Forrest has flagged his intention to turn Fortescue Metals (ASX:FMG) into a green powerhouse, going carbon neutral before 2030 via a combination of green hydrogen, ammonium and electricity projects; shares fell 4.2% on the news.

Global tech recovers, vaccine concerns in Europe, Chinese economic data improves

US markets recovered, powered ahead by the big tech names including Apple (NYSE:AAPL) and Tesla (NYSE:TSLA) as bond rates concerns faded.

The Nasdaq finished 1.0% higher, outperforming the Dow Jones and S&P500, up 0.5% and 0.76% respectively, with utilities and real estate benefitting as investors seek new income sources.

Chinese economic data was released showing factory input had bounced 35.1% on 2020 levels and retail sales a further 33.8%.

Whilst the comparables are favourable, it’s a positive sign that the economy continues to recover strongly.

Chinese tech giant Tencent (HKG:0700) looks to be the latest company to bear the brunt of the regulator. Shares fell 3.5% overnight as the Government looks to clamp down on their aggressive acquisitions and massive power in digital payments.

According to Bloomberg, the fall now represents the value of the entire payments business, or close to $100 billion.

On the other hand, phone maker Xiaomi has been a key beneficiary of the Biden administration, adding 7.0%, as the Trump’s White House block on exports was reversed.

Finally, the rollout of the Astra Zeneca (LON:AZ) vaccine has been suspended in Germany, France, and Italy, despite receiving approval from the US.

The Inside Adviser