Wall Street wobbles on jobs report, ASX set for flat start; Australian dollar jumps
Staff reporter
Updated ,first published
A surge in ANZ Bank shares helped drive the Australian sharemarket higher on Thursday as investors pored over a raft of earnings results, while wealth giant AMP and online retailer Temple & Webster posted heavy falls.
The S&P/ASX 200 ended the day 0.3 per cent or 28.70 points higher, at 9043.50, with four of 11 industry sectors in positive territory, led by utilities and banks.
ANZ Bank soared 8.5 per cent after it revealed in a trading update it made $1.9 billion in profits in the December quarter, with its expenses falling as a result of deep cost-cutting under new chief executive Nuno Matos, while its profit margins also moved higher. Compared with the same quarter last year, ANZ’s profits rose 6 per cent. “The quarterly result highlights the early progress we are making in executing our ANZ 2030 strategy,” Matos said.
The other major banks also jumped, with Commonwealth Bank soaring 5.4 per cent, building on big gains a day earlier, while Westpac rose 1.8 per cent and National Australia Bank advanced 2.3 per cent.
AMP shares plunged 26.6 per cent after its results disappointed the market, with the wealth manager’s full-year statutory profits falling to $133 million, from $150 million a year earlier.
Barrenjoey analyst Andrew Adams said the company’s outlook for revenue margins was below expectations and likely to drive downgrades in analysts’ forecasts for the company’s future performance. “Capital was not as strong as expected, so it is difficult to see what supports the share price today,” Adams said.
Shares in Origin Energy lifted 3.9 per cent on Thursday after the electricity and gas giant lifted its profit target for one of its key divisions despite a 45 per cent plunge in first-half profit.
Although Origin’s net profit sank from $1.01 billion to $557 million for the six months to December, its underlying earnings of $593 million came in higher than analysts had been forecasting amid a stronger-than-expected contributions from the company’s domestic retailing and generation division and its jointly owned liquefied gas venture in Queensland. Energy stocks are mixed, with Woodside Energy up 1.4 per cent and Santos sliding 0.7 per cent.
Spiking gold and silver prices are driving up earnings among Australia’s precious metal miners. Northern Star shares rose 4 per cent after it reported a 19 per cent rise in earnings for the half-year to December because of a 31 per cent increase in the average realised gold price. Costs increased 9 per cent, but the group nonetheless recorded a 41 per cent increase in net profit after tax to $714 million.
South32, a major silver producer, said its earnings increased 3 per cent over the half-year, but it reported a substantial 29 per cent jump in after-tax profit to $651 million. Its shares fell 3 per cent. Iron ore miners bounced higher, with BHP up 2.5 per cent, Rio Tinto rising 2.3 per cent and Fortescue 0.5 per cent higher.
Healthcare giant CSL tumbled 6.9 per cent to continue a tumultuous week marked by the sudden resignation of chief Dr Paul McKenzie on Tuesday followed by half-year results on Wednesday that fell short of market estimates, and announcing $1.5 billion in writedowns.
Tech shares plunged, with WiseTech losing 6.6 per cent and Xero 8.4 per cent lower.
Lendlease CEO Tony Lombardo will step down in August, after the company releases its full-year results, to relocate to South-East Asia for a new job. He’s worked at the company for 18 years, including the last five years in the top job. Lendlease has engaged an executive search firm to find a replacement. Its shares fell 0.2 per cent.
Market operator ASX Limited fell 1.7 per cent after it reported an 8.3 per cent rise in net profit to $263.6 million, while revenue rose 11.2 per cent, helped by growth across its four business units. The company has faced intense scrutiny and criticism from regulators lately over a series of technical bungles, with the Australian Securities and Investments Commission slapping it with a $150 million capital charge in December. Its chief executive Helen Lofthouse this week said she would step down in May.
Temple and Webster plunged by 32.6 per cent after its half-year results, which undershot expectations. The company reported EBITDA margins of 3.6 per cent, which fell short of market forecasts of 3.9 per cent, according to a note from Jarden analyst Aryan Norozi. Net profits of $5.8 million fell below expectations of $8 million, and were lower than net profits recorded this time last year ($9 million).
The share price collapse came despite a 19.8 per cent revenue lift to $375.9 million and a 12.8 per cent improvement on delivered margins.
The Australian dollar was trading at US71.13¢ shortly after 5pm.
On Wall Street, US stocks felt both the upside and downside of a surprisingly strong report that said the nation’s unemployment rate improved last month.
After initially rising toward an all-time high, the S&P 500 flipped between gains and losses before finishing with a minuscule dip of less than 0.1 per cent. The Dow Jones dropped 66 points, or 0.1 per cent, and the Nasdaq composite fell 0.2 per cent. Both also erased early gains.
Elsewhere, Treasury yields remained higher in the bond market after the Labor Department said US employers added 130,000 jobs to their payrolls last month, more than economists expected. That helped calm worries from a day earlier, when a discouraging report suggested spending by US households, the main engine of the economy, may be stalling.
On one hand, the strong data on jobs raises hopes that the US economy can remain solid and keep driving big profits for companies. Stocks in the energy and raw-material industries jumped to some of the bigger gains in the S&P 500, for example, and their profits tend to be closely tied to the health of the economy.
But on the other hand for the broad stock market, the stronger-than-expected jobs data could also keep the Federal Reserve on hold when it comes to cuts to interest rates. And higher rates can drag on prices for stocks and all kinds of other investments.
With AP
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