Roy Keenan from Yarra Capital Management shares insights with James Dunn from The Inside Network on risk management. The Inside Adviser
Lauren Ryan from Thinktank goes in-depth with Laurence Parker-Brown from The Inside Network on the role of asset-backed securities in offering resilient income. The Inside Adviser
China woes weigh on local market
The Australian share market’s major indices dropped on Monday and the Australian dollar slipped to a nine-month low, after a Chinese developer’s potential collapse raised fresh concerns about China’s economy. Property giant Country Gardens was on the brink of default after missing payments on two bonds last week, and that spells worries for the country’s real estate sector.
On the back of the news, the materials sector reacted poorly, with the sector index sliding 1.7 per cent amid concerns about Chinese demand for commodities. Iron ore futures briefly fell below $US100 a tonne, and that pushed Rio Tinto to a loss of $2.48, or 2.3 per cent, to $106.52; while BHP gave up 98 cents, or 2.1 per cent, to $44.75; and Fortescue Metals lost 38 cents, or 1.8 per cent, to $20.62.
That was lead in the saddlebags of the benchmark S&P/ASX200 index, which finished down 63.1 points, or 0.9 per cent, to 7,277.0, while the broader All Ordinaries dropped 61.1 points, or 0.8 per cent, to 7,493.1. Eight of the ASX’s 11 sectors finished lower.
In energy, Woodside Energy spiked 38 cents, or 1 per cent, to $38.60, while Santos advanced 2 cents, to $7.94. In coal, Whitehaven Coal lost 9 cents, or 1.2 per cent, to $7.14; New Hope Corporation eased 3 cents, or 0.5 per cent, to $5.63; Coronado Global Resources also surrendered 3 cents, in its case 1.9 per cent, to $1.59; and Stanmore Resources lost 6 cents, or 2.1 per cent, to $2.78.
In the lithium world, producer Allkem sank 57 cents, or 3.9 per cent, to $13.97; fellow producer Pilbara Minerals plunged 32 cents, or 6 per cent, to $4.99; IGO, which produces nickel as well as lithium, gave up 22 cents, or 1.7 per cent, to $12.91; and Mineral Resources, which mines iron ore and lithium, fell $1.97, or 2.9 per cent, to $66.24.
Lithium project developer Liontown Resources lost 3 cents, or 1.1 per cent, to $2.71; and Core Lithium retreated 1.5 cents, or 2.6 per cent, to 56 cents; but Lake Resources jumped 1.5 cents, or 7.7 per cent, to 21 cents, and is up 20 per cent since answering queries that the ASX had about its Kachi lithium project in Argentina. Rare earths producer Lynas slipped 7 cents, or 1 per cent, to $6.95, while copper major Sandfire Resources burned 8 cents, or 1.2 per cent, to $6.39.
Reporting season rolls on
Profit reporting season moved into one of its busiest weeks, and there were the usual pockets of good news. Automotive marketplace Carsales.com surged $1.72, or 7 per cent, to $26.33 after the announced double-digit revenue and earnings growth in all of its main markets.
Electronics retailer JB Hi-Fi jumped $1.30, or 2.8 per cent, to a six-month high of $48.51, as the company beat analyst expectations with a full-year profit of $524.6 million, down almost 4 per cent on last year, but better than analysts’ expectations of $505 million. Revenue lifted 4.3 per cent, to a record $9.63 billion, boosted by strong sales of the iPhone 13, audio products and gaming consoles, defying sagging consumer sentiment.
But there are also always disappointments for the market. Oil and gas company Beach Energy dropped 6 cents, or 3.6 per cent to $1.61, after beating estimates with a $385 million full-year profit, but foreshadowing weaker-than-expectation gas production in the 2024 financial year.
`
Construction and real estate company Lendlease walked back 24 cents, or 2.8 per cent, to $8.24 after reporting a statutory loss of $232 million, after the UK retrospectively extended builders’ liability for defects in residential buildings from six years to 30 years. Stripping out that effect, the company’s core operating profit slid 7 per cent, to $257 million.
The Big Four banks were all under pressure, with ANZ retreating 22 cents, or 0.9 per cent, to $25.13; Westpac declining 24 cents, or 1.1 per cent, to $21.91; NAB softening 23 cents, or 0.8 per cent, to $28.33; and CBA losing 70 cents, or 0.7 per cent, to $103.70.
Global investment bank and wealth manager Macquarie Group gained 39 cents, or 0.2 per cent, to $175.45; and regional banking leader Bendigo and Adelaide Bank eased 27 cents, or 2.9 per cent, to $8.92 after posting full-year cash earnings of $576.9 million, up 15.3 per cent from last year, but short of analyst consensus expectations.
Chip bonanza leads US indices higher
In the US, a comeback in tech stocks led the market higher in the Monday session, with the tech-heavy Nasdaq Composite Index up 143.48 points, or 1 per cent, to 13,788.33; the S&P 500 gaining 25.67 points, or 0.6 per cent, to 4,489.72; and the 30-stock Dow Jones Industrial Average advancing 26.23 points to 35,307.63. Chipmaker Nvidia was the star, up 7 per cent after investment bank Morgan Stanley said the company was benefiting from a “massive shift” in AI.
On the bond market, the benchmark US 10-year Treasury bond yield gained 4.1 basis points to 4.195 per cent, while the 2-year yield, considered more sensitive to policy changes, added 7.6 basis points to 4.969 per cent.
Gold is down US$4.80, or 0.3 per cent, to US$1,939 an ounce; the global benchmark Brent crude oil grade is down 60 cents, or 0.7 per cent, at US$86.21 a barrel; and US West Texas Intermediate oil is trading 15 cents lower, at US$82.36 a barrel.
the Australian dollar is buying 64.86 US cents this morning, its lowest level against its US counterpart in nine months, and in line with where it ended at the ASX close on Monday.
