ASX jumps, Orica gallops 15%, Zip Co inks deal with Microsoft: Aus shares 1.1% higher at noon

The Australian sharemarket is off to a brighter start jumping 1.2 per cent this morning after a recovery on Wall St, fueled by investors buying the dip. At noon, the S&P/ASX 200 is 1.1 per cent or 82 points higher at 7,278. The SPI futures are pointing to a rise of 69 points.

Consumer staples & energy leads the broad-based gains

Gains are across the board led by consumer staples, energy, and financial stocks as they attempt to offset the loss this week to cap off the month, and the quarter in bullish territory.

The declines so far have put the local bourse on the backfoot after 11 straight months of gains, however the moves so far have been positive this morning. With the current see-saw performance, the index will need to make some solid gains after its 2.5 per cent tumble this week.

Orica skyrockets, Westpac, Woolies & CSL leaps

Orica (ASX:ORI) are trading over 14.8 per cent higher on the back of a broker upgrade. Check out broker moves below to see what it’s all about.

Blue chip bulls are charging ahead with the likes of Woolworths (ASX:WOW) and Transurban (ASX:TCL) spiking higher by over 2 per cent while biotech CSL (ASX:CSL), BHP (ASX:BHP) are leaping 1 per cent higher.

The yield on the 10-year treasury note held steady after its surge which has helped banking stocks move into the black with the nation’s oldest bank, Westpac (ASX:WBC) gaining over 2 per cent.

Zip Co inks deal, Fortescue suspends operations

Zip Co (ASX:Z1P) has inked a deal with tech giant Microsoft to integrate the buy-now pay-later technology with Microsoft’s Edge Shopping Experiences. The launch slated for November this year will give the U.S. market a taste-test of the experience. Shares are trading 1.4 per cent higher at $7.07.

Fortescue Metals (ASX:FMG) has suspended operations at their Solomon Hub in Pilbara after a serious incident. The miner is working with WA Police and WA mining watchdogs pending a full investigation. Shares are trading 1.7 per cent higher at $15.05.

South 32 splurges while Oil Search walks away

South32 (ASX:S32) are set to creep up their stake in Mozal Aluminium in Mozambique by 25 per cent to 72.1 per cent for US$250 million. The miner will deplete their US$553 million bank balance as of August to settle the deal. Shares are on the move, up 1.9 per cent at $3.45.

Oil Search (ASX:OSH) have dropped the joint venture announced in December last year. The initial plan was to redetermine interests in the PNG Liquified Natural Gas joint venture with ExxonMobil, Santos, the PNG Government and its communities. Shares are trading over 1 per cent higher at $4.35.

China’s contracts while New Zealand explores digital currency

Investors also digested China’s official PMI figures which showed its first contraction in the nation’s manufacturing hub since February last year, when the pandemic was heating up. The figures were mixed with their manufacturing PMI dipped to 49.6 from 50.1, a tad under expectations of 50 while the services PMI gained 53.2 from 47.5, coming in above the expectations of 49.8. The composite PMI rose to 51.7 from 48.9.

China’s economy has started to show signs of slowdown last month as Covid-19 cases started to rise. Not to mention the Evergrande saga, the missed coupon payments, and the mystery if Beijing will step in to help the indebted property giant.

Meanwhile, the Reserve Bank of New Zealand are taking lead from China and exploring their own digital currency. The central bank is set to start a consultation process to “help address some of the downsides of reducing physical cash use and services is something we want to explore for New Zealand,” said Christian Hawkesby, assistant governor and general manager of economics, financial markets and banking.

Local economic news

Private sector credit rose 0.6 per cent versus the expectations of 0.7 per cent as per Westpac group economists, as covered this morning as per the Reserve Bank. Over the year, it rose 4.7 per cent vs 4.6 per cent that was expected, accelerating to its highest level since May 2018.

Job vacancies fell by 10 per cent between May and August however, remained 46 per cent above pre-pandemic levels according to new seasonally adjusted figures from the Australian Bureau of Statistics (ABS).

The number of dwellings approved rose 6.8 per cent in August, seasonally adjusted, ending a run of four consecutive monthly declines, according to the ABS.

Broker moves

Credit Suisse rates Orica (ASX:ORI as an outperform with a price target of $16.11. Upon review of their FY21 trading update, the broker observed that the impairments to Burrup and their Europe, Middle East and Africa division hadn’t tainted the company’s outlook.

The broker believes that the volume is possibly stronger and impacts to ammonia costs are not as material than previously expected.

Credit Suisse sees that the cost of gas and ammonia are likely to remain a headwind through to mid next year, the pass through of costs through contracts is likely to recover in the second half of next year.

The broker retains its outperform rating and lifts its target price to $16.11 from $15.66.

Shares in Orica (ASX:ORI) are trading 14.8 per cent higher at $13.83.

IPOs

Mitre Mining (ASX:MMC) made their debut today on the ASX with an issue price of $0.20. The stock opened at $0.26, touched a high of $0.285 and now trading at $0.27.

Best and worst performers

The best-performing sector is Consumer Staples, up 2.2 per cent. The sector with the fewest gains is Information Technology, up 0.3 per cent.

The best-performing stock in the S&P/ASX 200 is Orica (ASX:ORI), trading 14.3 per cent higher at $13.76. It is followed by shares in Beach Energy (ASX:BPT) and Codan (ASX:CDA).

The worst-performing stock in the S&P/ASX 200 is Gold Road Resources (ASX:GOR), trading 4.9 per cent lower at $1.15. It is followed by shares in Pinnacle Investment (ASX:PNI) and Chalice Mining (ASX:CHN).

Commodities and the dollar

Gold is trading at US$1731.24 an ounce.
Iron ore is 1.8 per cent higher at US$114.13 a ton.
Iron ore futures are pointing to a rise of 8.54 per cent.
One Australian dollar is buying 71.93 US cents.