Australian sharemarket rises across the board, only energy and telco sectors lose ground

Rebecca Le MayNCA NewsWire
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Camera IconNot Supplied Credit: News Corp Australia

The Australian sharemarket lifted across the board amid a slew of quarterly trading updates and after a positive lead from Wall Street, with only energy and telco sectors losing ground.

The benchmark S&P/ASX200 index strengthened 0.53 per cent to 7413.7, while the All Ordinaries Index lifted 0.48 per cent to 7727.2.

CommSec analyst Steven Daghlian said it was the fourth gain in the past five trading days, with the local bourse hitting a fresh three-week high in intraday trade.

“This is partly off the back of some strong gains in the United States last night, which has improved now for five straight days. They’ve had encouraging profit results … already about 80 per cent of companies on the S&P500 there are beating the market’s expectations,” Mr Daghlian said.

The US earnings reporting season would peak next week, with the five biggest companies including Apple, Google, Microsoft and Amazon set to reveal their numbers, he added.

“That’s going to be something to watch,” Mr Daghlian said.

OMG chief executive Ivan Tchourilov said the local bourse advanced with some gusto, with the S&P/ASX200 breaking through the 50-day moving average after being stuck below since this time last month.

“Technology was front and centre today, with a slew of valuation increases across the board,” he said.

“The equities market does not seem to be paying any heed to inflation-lead rate hike concerns, despite the bond market pricing in a hike for as soon as May next year.”

Buy-now-pay-later market leader Afterpay put on 1.57 per cent to $126.25, smaller rival Zip added 0.28 per cent to $7.12, accounting software provider Xero gained 1.42 per cent to $146.19 and logistics software provider Wisetech Global rose 0.84 per cent to $53.76.

Online-only retailer Kogan jumped 6.68 per cent to $11.66 on the back of its first quarter update.

“Customer numbers and sales are up, but the most significant piece of confidence comes from a drop in inventory costs,” Mr Tchourilov said.

“Kogan took a hammering after releasing its full-year report in August when inventory costs took a huge chunk out of underlying profitability.

“Resolving this and ongoing supply chain issues will help them capture more value from revenues and return money to shareholders.

“Investors will also be looking for sustainable revenue levels as the country moves away from harsh lockdowns.”

Covid Chermside
Camera IconVarious retailers detailed how recent lockdowns had hurt their business. David Clark Credit: News Corp Australia

Super Retail Group, which is behind chains including Supercheap Auto, Rebel and BCF, also provided its financial year-to-date update, saying lockdowns had dented trade, with Macpac reporting the worst results.

“Freight and logistic costs associated with elevated levels of inventory could impact future gross margins as the outlook for supply chain remains challenging,” the group warned, but said it was well prepared for the all-important Christmas trading period with a fortified inventory.

Its shares lifted 1.69 per cent to $13.23.

Bedlinen retailer Adairs also reported lower sales, saying mandated store closures in NSW, Victoria, the ACT and Auckland had slashed store trading days by about 47 per cent, costing about $28-32m.

Adairs also said it was well stocked for the festive rush and its shares put on 2.3 per cent to $4.01.

Woolworths booze spin-off Endeavour Group, which is behind BWS and Dan Murphy’s, said it too had suffered from lockdowns but had invested in its hotels business during the first quarter and hoped rising vaccination rates would mean “more normal operations” in time for Christmas and summer.

Its shares appreciated 1.19 per cent to $6.79.

Mr Tchourilov said Beach Energy’s quarterly update took some petrol out of its motor, slipping 3.68 per cent to $1.44.

“Lower production levels mean they couldn’t take full advantage of the record oil prices,” he said.

Dean Wells
Camera IconEndeavour Group’s hotels business was hit hard during lockdowns in the September quarter and even retail sales dipped. Monique Harmer Credit: News Corp Australia

“They also saw a spike in costs related to some new drilling projects, which require a significant amount of resources before reaching optimal output levels.

“Beach Energy has been hot property on the market since late September, when power shortages started driving up the price of oil and gas.

“Whitehaven Coal, which has also been riding the price inflation wave, followed Beach Energy down, the two of which being the biggest laggards today in the 200 index.”

Whitehaven shares dropped 7.86 per cent to $3.05.

Among the miners, Fortescue eased 0.4 per cent to $14.50 and Rio Tinto inched seven cents higher to $98.08, announcing after market close a new target to reduce its ‘Scope 1 & 2’ carbon emissions by 50 per cent by 2030, more than tripling its previous target.

“In a further blow to coal-burning energy provider AGL, which counts Rio Tinto as its biggest customer, Rio will also progress options to switch its Tomago aluminium smelter to renewable energy,” Greenpeace noted.

BHP added 0.47 per cent to $38.57 after Canadian nickel miner Noront Resources backed its sweetened takeover offer, besting a rival bid by Andrew “Twiggy” Forrest’s Wyloo Metals it had accepted just a day earlier.

OZ Minerals, which has benefited from surging copper prices recently, upped its full-year gold production guidance and lowered its cost estimates, but its shares retreated 0.42 per cent to $25.88.

ANZ put on 0.85 per cent to $28.39, Commonwealth Bank advanced 1.1 per cent to $105.03, National Australia Bank improved 0.63 per cent to $28.83 and Westpac firmed 0.79 per cent to $25.68.

Telstra backtracked 2.09 per cent to $3.75.

The Aussie dollar was fetching 74.92 US cents, 54.27 British pence and 64.31 Euro cents in afternoon trade.

Originally published as Australian sharemarket rises across the board, only energy and telco sectors lose ground

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