The Match Out: Early gains wiped out, Tech selling gathers steam, Energy & Utilities strong
A rollercoaster ride for the ASX today, to trade in a huge 284pt/4.1% range, falling to levels not since April 1st last year. With the latest tumble the fall from the 5th of January high of 7620 extended to 862pts/-11.3%. Growth sectors were the shining light early on, before becoming the main drags in the afternoon as the market rolled over – unsurprising given the headlines of higher inflation and higher rates driving markets. Aussie 10-year bond rates traded over 2% for the first time since October, the expectation being that now the most important central bank in the world is set to raise rates, that gives the green light for others to follow.
- The ASX 200 finished down -123pts/-1.77% at 6838
- Despite the weakness, two sectors traded higher today – energy up +2.11% helped by commodity markets, and utilities up 1.18% helped mostly by a strong move in AusNet (AST) trading +4.45% higher, while a +1.69% gain from APA Group (APA) also helped.
- Unsurprisingly Tech was in the firing line, falling -4.95% with higher yields pressuring valuations.
- Insignia (IFL), +1.54%, against the grain, trading higher on the back of a solid 2Q update which saw FUMA grow despite a small drop in Advisor numbers.
- Retailers saw mixed fortunes. Premier Investments (PMV), +2.07%, their retail update saw a 0.5% rise in 1H sales, expecting around a 5% jump in earnings when they report. Kogan.com (KGN), -12.27%, was hit hard on slowing growth and higher costs.
- Iron Ore Futures up around 1%
- Gold was down in Asia, off $35 to US$1812 at out close, Coal prices have remained strong
- Asian markets were weak – Japan’s Nikkei currently down more than 3% & the Hang Seng -2.66%.
- US Futures were lower throughout our session. Currently the S&P futures are down -1.32% and Nasdaq facing -1.58%.
ASX 200 chart
Paladin (PDN) 68c
PDN -1.45%: Australia top uranium name was out with their quarterly production report today. Its been a busy quarter despite the Langer Heinrich mine remaining on care and maintenance. They’ve been doing drilling and technical work in preparation for a restart as the uranium market continues to improve. Total resource was increased to 77Mlb of ore though expected costs were also higher in the updated restart plan. Further exploration is in the works while the company still has a net cash balance of $US38m.
MM is bullish PDN here.
Oz Minerals (OZL) $25.51
OZL -2.89%: Production numbers out today that came in at the bottom end of the guided range for Copper although that had been flagged in the September quarter update, while Gold production was at the high end of the range – costs were in line with expectations. Importantly, OZL delivered another strong year – the 7th consecutive year of meeting copper guidance! Taking a step back, OZL has just had the best calendar year since 2015 and the second best year overall. CY22 guidance points to a record year for OZL up ~10% YoY and up 6% vs 2015 record (130kt).
MM remains bullish OZL
- Allkem Raised to Buy at HSBC; PT A$12
- Perseus Raised to Buy at Citi; PT A$1.90
- Nearmap Raised to Buy at Citi; PT A$2.10
- Mineral Resources Cut to Neutral at Citi; PT A$61
- Pro Medicus Raised to Outperform at RBC; PT A$58
- Appen Raised to Neutral at Evans & Partners Pty Ltd; PT A$9.85
- Fortescue Cut to Underperform at Credit Suisse; PT A$14
- Fortescue Cut to Hold at Bell Potter; PT A$18.33
- Adairs Cut to Hold at Ord Minnett; PT A$3.30
- GPT Group Cut to Neutral at JPMorgan; PT A$5.70
- Dexus Raised to Overweight at JPMorgan; PT A$12
- Abacus Property Cut to Underweight at JPMorgan; PT A$3.30
- Qube Raised to Overweight at JPMorgan; PT A$3.60
- Mineral Resources Cut to Underweight at JPMorgan; PT A$45
- Macmahon Cut to Hold at Argonaut Securities
Enjoy your night,
The Market Matters Team
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James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...