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ASX trims early lead, CBA and gold miners shine

Daily Market Update

Dip buyers emerge, ASX moves higher, EML Payments enters trading halt, Nuix continues to fall

The ASX200 (ASX:XJO) fell throughout the day despite a positive open, finishing 0.1% higher as dip buyers emerged following last week’s unexpected sell-off.

The IT and energy sectors were the stories of the day, with the former returning to normal heading 1.2% higher and the latter jumping 1.0% on an unexpected Federal Government announcement.

  • Prime Minister Scott Morrison announced the government’s intention to ensure Australia’s domestic oil production continues until at least 2027, amid threats the work of Ampol (ASX:ALD) and Viva Energy (ASX:VEA) would close early leaving Australia reliant on imports.

    The Fuel Security Package will provide some $108 million support to Ampol each year along with $125 million to support infrastructure upgrades aimed at delivering more efficient production with less impact on the environment.

    Both companies will also be able to carry less fuel on hand in a loosening of current restrictions; ALD finished 6.1% higher and VEA 7.0%.

    Crown Ltd (ASX:CWN) was also on the front foot, rejecting Blackstone’s $12.35 bid for the company and asking for more detail on Star Entertainment’s (ASX:SGR) merger proposal, shares were 0.8% higher.

    Carsales capital raise, Elders boosts dividend, Incitec Pivot continues to struggle

    Carsales.com (ASX:CAR) fell 11.8% after finalising their institutional capital raise, which saw $428 million in shares allocated at a price of $17.00. 

    The retail offer is now open, but with shares trading at just $17.20 there appears little arbitrage on offer around the purchase of US Trader Interactive

    Retail and farming supplier Elder’s (ASX:ELD) more than doubled their dividend, announcing a 20 cents per share payment after a year that saw revenue increase 22% to $1.1 billion.

    Net profit was also strong, growing 31% to $68.2 million, supported by the group’s expansion into retailing in 2020 along with improving farming and seasonal conditions; shares dropped 3.4%.

    Popular fintech EML Payments (ASX:EML) entered a trading halt after the Central Bank of Ireland flagged ‘significant regulatory concerns’ in a worrying move for investors.

    Gold miners have continued to gain steam, with the likes of Resolute Mining (ASX:RSG) and Evolution (ASX:EVN) jumping 9.6% and 5.9% respectively as the AUD continues to fall, whilst gold bullion gains in popularity following last week’s inflation print and cryptocurrency volatility.

    US markets weaker as inflation concern remains, AT&T to merge with Discovery, China data ‘disappoints’

    US markets finished weaker once again, the Dow Jones down 0.2%, the Nasdaq 0.4%, and the S&P500 0.3% as investors remain concerned about last week’s inflation and a shortage of almost every type of finished product.

    Tech shares including Apple and Microsoft remain the biggest detractors despite strong recent earnings reports.

    Chinese economic data is said to have disappointed after retail sales grew by only 17.7% in April on 2020 levels, a slowdown on March’s 24.9% rate, but once again reflecting the strength of the domestic economy. Industrial production also fell from 14.1% to 9.8%.

    There is talk that media giant AT&T (NYSE:T) may seek to spin-off and merge its main media business with Discovery, in an attempt to take on Netflix and Disney head on. Channels including Food Network, WarnerMedia, CNN, HBO, and TNT would be combined, yet shares fell 2.7% on the news.

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