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Materials lead ASX rally, Aussie wages lift 0.7% during March quarter
Australian shares closed higher for a fourth day following an overnight rally on Wall Street. The local index held onto its gains during the afternoon session, while investors digested the latest wage figures, which rose at a softer-than-expected 0.7 per cent over the March quarter and 2.4 per cent over the past year.
Given the growing divide between wages and the cost of living, the print may send a signal to the Reserve Bank of Australia to consider hiking the cash rate by 40 basis points rather than the standard 25 basis point move at its June meeting. Meanwhile, UK inflation jumped 9 per cent in April year-on-year, the highest level in more than 40 years.
At the closing bell, the S&P/ASX 200 was almost 1 per cent or 70 points higher at 7,183.
In an almost broad-rally, materials led the pack, up 2.5 per cent, followed by technology and real estate. On the other side, consumer staples were the only sector in the red amid news from Wall Street regarding Walmart’s profit earnings.
Iron ore prices rose with China moving to end its lockdowns. The largest miner on the index BHP (ASX:BHP) jumped 3.2 per cent to $47.01, while Champion iron (ASX:CIA) rose 5.3 per cent to $7.37 as the top performer.
Flight stocks were on the move. Flight Centre (ASX:FLT) rose 4.9 per cent to $21.24 and Corporate Travel (ASX:FLT) jumped 4.9 per cent to $22.36 amid international travel stocks rallying overnight on more expectations for a strong recovery.
There were a few stock standouts. AnteoTech (ASX:ADO) jumped 38.3 per cent to $0.13 on news that its updated EuGeni Covid-19 rapid antigen test had received regulatory approval in Europe. Weebit Nano (ASX:WBT) jumped 18.5 per cent to $2.69 after saying it’s not aware of anything that would directly affect the recent trading in securities, although it is aware of an article released today by Stocks Down Under referencing WBT. Despite the gain, the semiconductor’s share price was still down by almost 40 per cent from its February high.
Major banks were mixed with the only two bright spots ANZ Banking Group (ASX:ANZ), up 0.9 per cent to $25.84, and Macquarie Group (ASX:MQG). up 0.6 per cent to $181.50. The rest weighed.
A big day for company news
Fortescue Group (ASX:FMG) announced that Andrew Forrest will be appointed executive chairman, specifically overseeing the iron ore business for an interim period. Shares closed 1.8 per cent higher at $19.73.
Eagers Automotive (ASX:APE) warned an anticipated reduction in the number of new vehicles delivered to customers is expected to impact its half year financial performance. Shares closed 3.3 per cent lower at $11.50.
Boral (ASX:BLD) expects to take a $45 million hit to its FY22 earnings due heavy rainfalls in NSW and Queensland, and higher energy prices. Shares closed 3.1 per cent lower at $3.11.
EMVision Medical (ASX:EMV) was awarded $5 million in funding under the Australian Federal Government’s modern manufacturing initiative. Shares closed 5.2 per cent higher at $1.82.
BlueScope Steel (ASX:BSL) increased its earnings guidance for the second half of the 2022 financial year thanks to strong steel prices and spreads in the US despite a softer Aussie chain. Shares closed 1.5 per cent higher at $18.19.
SRG Global (ASX:SRG) secured a $95 million civil infrastructure contract with US-based industrial company Alcoa. Shares closed 5.1 per cent higher at $0.62.
Integral Diagnostics (ASX:IDX) agreed to acquire NZ-based Horizon Radiology in order to expand its presence in the Auckland market. Shares closed 0.5 per cent lower at $3.67.
Worley (ASX:WOR) was awarded a three-year engineering and procurement services contract by Shell to support five of its assets in the Gulf of Mexico. Shares closed 1.6 per cent higher at $14.84.
Monash IVF Group (ASX:MVF) has entered into a binding sale agreement for the acquisition of fertility services provider Pivet Medical Centre. Shares closed 5.9 per cent higher at $1.12.
Metcash (ASX:MTS) extended the term of its agreement to supply Drakes Supermarkets stores in Queensland for a further five years. Shares closed 2.3 per cent lower at $4.60.
Barclay invested another $75 million into investment bank Barrenjoey Capital, which is backed by Magellan (ASX:MFG). Shares closed 2.8 per cent higher at $14.97.
What else was on watch?
In AGMs, Eagers Automotive (ASX:APE) had their annual meeting after doubling full year net income in their February update, while shares closed 3.3 per cent lower at $11.50. Telix Pharmaceuticals (ASX:TLX) was also on the docket, with shares up 0.7 per cent to $4.18.
In broker moves, Jefferies cut Commonwealth Bank (ASX:CBA) to hold with a price target of $114, while shares fell 0.7 per cent to $104.35. Credit Suisse upgraded Oz Minerals (ASX:OZL) to neutral with a price target to $21, while shares rose 3.6 per cent to $22.82. Credit Suisse rated Mineral Resources (ASX:MIN) as a new outperform with a price target of $73, while shares lifted 4.6 per cent to $60.84. Morgan Stanley upgraded James Hardie (ASX:JHX) to overweight, with shares up 2.7 per cent to $38.50. Bell Potter raised United Malt (ASX:UMG) to buy with a price target of $4.55, with shares up 1 per cent to $4.00.
AGL Energy (ASX:AGL) after JP Morgan organised a block trade for Mike Cannon Brookes for $467 million, according to the AFR. Shares finished flat at $8.62 despite its jump yesterday.
The Dow Jones futures are pointing to a rise of 6 points.
The S&P 500 futures are pointing to a fall of 2 points.
The Nasdaq futures are pointing to a fall of 23 points.
The SPI futures are pointing to a rise of 63 points when the market next opens.
Best and worst performers
The best-performing sector was Materials, up 2.5 per cent. The worst-performing sector was Consumer Staples, down almost 1 per cent.
The best-performing stock in the S&P/ASX 200 was Champion Iron (ASX:CIA), closing 5.3 per cent higher at $7.37. It was followed by shares in Paladin Energy (ASX:PDN) and South32 (ASX:S32).
The worst-performing stock in the S&P/ASX 200 was PolyNovo (ASX:PNV), closing 4.6 per cent lower at $1.24. It was followed by shares in Sims (ASX:SGM) and Eagers Automotive (ASX:APE).
Japan’s Nikkei has gained 0.9 per cent.
Hong Kong’s Hang Seng has gained 0.4 per cent.
China’s Shanghai Composite has gained 0.2 per cent.
Commodities and the dollar
Gold is trading at US$1812.08 an ounce.
Iron ore is 2.2 per cent higher at US$130.15 a ton.
Iron ore futures are pointing to a fall of 2.8 per cent.
Light crude is trading $0.57 higher at US$110.20 a barrel.
One Australian dollar is buying 70.28 US cents.