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ASX retreats, Afterpay and Zip rise again

Daily Market Update

ASX claws back, energy hit, IT takeover rally spreads

The ASX 200 (ASX: XJO) spent most of the day clawing back from early losses, ultimately finishing down just 0.2% despite a weak lead from the US market.

The story was similar to yesterday with 8 of the 11 sectors down but technology continuing to drive performance, up 4.4%.

As flagged in yesterday’s update, the energy sector took a significant hit due to growing concerns with Iran, falling 1.4% with Origin Energy (ASX: ORG) avoiding the sell off to gain 2.8%.

Afterpay Ltd (ASX: APT) gained another 11.4% with the stock now trading In line with Its suitor, Square Inc (NYSE: SQ) which jumped 10% overnight after a strong earnings report.

The deal has seemingly made traders believe everything was on sale with Zip Co Ltd (ASX: Z1P) jumping 7.5% and even struggling e-commerce play Redbubble Ltd (ASX: RBL) added 5.2% without any news.

All eyes were on the Reserve Bank of Australia with experts predicting the planned tapering of bond purchases would be paused given the expanding outbreak. As usual, the pundits were wrong and they went ahead, reducing bond purchased to $4 billion per week from November.

The Importance of government stimulus was reflected in today’s building approval numbers with residential requests down 6.7% driven by an 11.6% drop in detached dwellings as the Home Builder scheme came to an end.

Credit Corp profits quintuple, Murdoch not done yet, Crown, Qantas make big calls

Shares in debt collection agency Credit Corp Group Limited (ASX: CCP) added just 0.2% after reporting a 500% increase in profit to $88 million for the financial year.

Revenue rose 19.6% with management citing their unique analytical ability as being behind their success in buying loan books from distressed sellers during the pandemic. The dividend was returned at 36 cents per share, in line with pre-pandemic 2019 payment levels.

Crown Resorts Ltd (ASX: CWN) announced the departure of Melbourne CEO Xavier Walsh after less than 12 months in charge as the board seeks to quell the impending threat of two Royal Commissions.

Similarly, Qantas Airways Limited (ASX: QAN) shares fell 2.1% after standing down a further 2,500 workers due to the extended lockdowns and delta outbreaks.

Rupert Murdoch doesn’t appear to be done yet, after selling the majority of his media assets to Walt Disney Co (NYSE: DIS) with News Corp (ASX: NWS) announcing the acquisition of data provider Oil Price Information Service for $1.56 billion.

The group adds to the booming Dow Jones online media business with operations spanning renewable energy, oil, and other commodity pricing and data collection; shares finished flat.

US markets higher on earnings, IBM rallies, Chinese crackdown extends to gaming

The S&P 500 finished at a record high for the 42nd time this year, adding 0.8% as earnings season continued to drive positive sentiment. The Dow Jones finished 0.8% higher with the Nasdaq comparatively weaker, adding just 0.6%.

The markets were able to overcome the latest Chinese regulatory pressure, for the second time in two weeks.

This time it was a State-Owned news outlet suggesting that online video games were ‘spiritual opium’ for children, with investors worried this may result in their banning.

China’s biggest company Tencent Holdings Ltd (HKG: 0700) fell 6.1%, NetEase Inc (HKG: 9999) was down 7.8% and Activision Blizzard (NASDAQ: ATVI) fell 3.5%.

Shares in semiconductor chip manufacturer NVIDIA Corporation (NYSE: NVDA) were 0.3% higher despite the UK government potentially putting a hold on their acquisition of major competitor Arm Holdings.

Sticking with gaming, Activision actually delivered profit growth nearing 50% for the quarter, after revenue exceeded US$2.3 billion despite a decline in ‘in game’ purchases.

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