Source : THE AGE NEWS
The Australian sharemarket has extended early gains as investors digest a raft of results from some of the bourse’s biggest companies, with Commonwealth Bank and AGL among the big winners.
The S&P/ASX 200 was up 122.4 points or 1.4 per cent in early afternoon trade, as six of 11 industry sectors traded in negative territory but financial stocks helped to boost the index.
Commonwealth Bank bounced 8 per cent as it announced a rise in half-year profits to $5.4 billion. It also hiked its dividend while chief executive Matt Comyn said that persistent inflation was putting “upward pressure” on interest rates. The rest of the big four were also higher. Westpac was up 1.6 per cent, National Australia Bank rose 1.3 per cent and ANZ Bank was up 1 per cent.
Health giant CSL tumbled 12.9 per cent. That followed news its earnings for the December half-year had dived 80 per cent after it was forced to write down the value of its assets by $US1.1 billion ($1.6 billion). The biotech giant’s poorly timed announcement of its chief executive’s departure on Tuesday afternoon wiped tens of billions of dollars from its market valuation.
Mining stocks advanced. Among the big iron ore miners BHP gained 1.2 per cent, Rio Tinto rose 1.1 per cent and Fortescue moved 1.6 per cent higher. Gold miner Northern Star slid 0.3 per cent but Evolution Mining jumped 6.2 per cent after it reported a record underlying profit of $785 million.
Energy giant AGL rose 8.9 per cent after releasing its results despite its net profit falling more than 40 per cent from $162 million to $94 million in the six months to December 31. Earnings were dragged down by losses on energy derivative contracts. On an underlying basis, AGL’s half-year profit, which fell 6 per cent to $353 million, was better than analysts had been expecting. The company also announced it has agreed to sell its telco business to Aussie Broadband in a deal it says will simplify its operations and slash costs. Woodside Energy added 0.4 per cent while Santos was flat.
Kerry Stokes’ $20 billion industrial group SGH reported a slight lift in net profit to $471 million. It’s the group’s last result to include its stake in embattled group Seven West Media which merged with Triple MMM owner Southern Cross Media, last month.
Revenue fell 1.8 per cent to $5.4 billion but SGH managed to lift earnings after cost-cutting and a strong performance from Boral. Offsetting that were declines across WesTrac, Coates, and its energy business as well as another sharp decline from Seven West. Its shares are 4.7 per cent higher.
Stagnating pizza giant Domino’s gained 2.6 per cent after announcing senior McDonald’s executive Andrew Gregory will be its new global chief executive. The group’s executive chairman Jack Cowin has been hunting for a new global CEO since June last year, when Mark Van Dyck resigned after just seven months in the top job.
The Australian dollar was trading at US70.96¢ at 12.55pm AEDT.
Overnight, stocks drifted on Wall Street following a mixed set of profit reports from big US companies, as toy maker Hasbro jumped but drinks giant Coca-Cola slipped. Hopes also rose that the Federal Reserve would cut interest rates later this year to boost the economy following a discouraging report on retail sales.
The S&P 500 fell 0.3 per cent after briefly rising above its all-time high, which was set a couple of weeks ago. The Dow Jones Industrial Average added 52 points, or 0.1 per cent, to its own record, while the Nasdaq composite fell 0.6 per cent.
The action was strong in the bond market, where Treasury yields fell after a report showed US retailers made less money at the end of last year than economists expected. Shoppers spent roughly the same amount in December as they did in November, less than the modest growth that economists expected.
Altogether, the data should help the Federal Reserve decide what to do with interest rates. The Fed has put interest rates cuts on hold, and too-hot inflation could keep it on pause for a long time. But a weakening of the job market, on the other hand, could push it to resume cuts more quickly.
Hasbro climbed 7.5 per cent after topping analysts’ expectations for profit and revenue in the latest quarter. The toymaker credited its Magic: The Gathering game in particular, and announced a program to send up to $1 billion ($1.4 billion) of cash to investors by buying back its own stock.
With AP
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