Premier profits jump, Div lift for Soul Patts & Brickworks: ASX closed 1.1% higher

The Australian sharemarket rose for its 3rd day as investors remained optimistic despite the global uncertainties creeping around. The local bourse rallied taking a strong lead from Wall St with technology and energy stocks advancing.

There was not one sight of red across the sectors with utilities not far behind the energy sector, up 2.1 per cent. In comparison, tech stocks powered up by 3 per cent while energy stocks lit 2.8 per cent higher. There were a few sectors that marginally rose with healthcare, materials, and consumer staples marginally adding over 0.2 per cent.

There were quite a few earnings reports that took investors’ attention which included retail chain owner Premier Investments (ASX:PMV), Washington H. Soul Pattinson (ASX:SOL) and its partner in crime, Brickworks (ASX:BKW). To see how these stocks closed by the session and why, join me at Stocks of the Hour here

Embattled property developer Evergrande exploded at the opening bell, over 24 per cent higher on the Hong Kong Hang Seng. At time of writing, China’s second largest property developer are trading 16.3 per cent higher after they pledged yesterday to pay the interest on a $8.5 billion bond on time. The commitment appears to have calmed nerves for now but let’s see. The company is sitting in over $400 billion in debt and there are more interest and loan repayments to go.

In Europe, the German DAX, the Paris CAC and London’s FTSE have taken lead from Wall St and are trading in the black as we speak.

Looking at a few stocks that were on the move were News Corp (ASX:NSW), it lifted 8.4 per cent closing at $32.56 after Rupert Murdoch’s media empire doubled its share buy-back program to $1.4 billion (US$1 billion).

Drug developer Telix (ASX:TLX) fell over 15 per cent at the open, closing 5.6 per cent lower at $6.42 on news that the U.S. regulator delayed their decision to approve its flagship product by three months.

Tonight, we look to Wall St for their weekly jobless claims, an indicator of where the jobs market is at, a timely report after the Federal Reserve finished their two-day meeting. However, it bumped higher last week due to the number of Americans filing for first time unemployment benefits after Hurricane Ida hit. Also purchasing managers indexes are out which will capture some attention. Wall St’s futures are pointing to a positive start, so a likely continued momentum after a volatile week.

Elsewhere, Japan’s Nikkei is closed for another public holiday, while Bank of England is slated to meet and are expected to keep rates steady.

At the closing bell, the S&P/ASX 200 was 1 per cent or 73 points higher at 7,370.

Local economic news

Australia’s private sector saw business activity decline for a third consecutive month in September according to the IHS Markit flash purchasing managers index.

The Flash Australia composite output index hit 46 points this month, the highest reading in three months from 43.3 points in August. The reading does sit below the 50-point mark which indicates contraction. The improvement comes as Covid-19 restrictions saw a “slight easing of restrictions” according to Jingyi Pan, economics associate director at IHS Markit.

However, the Flash Australia manufacturing PMI jumped to 57.3 points to a three-month high from 52 reading in August. The flash monthly manufacturing output index jumped to 53.3 points up from 45.7 a month ago.

Payroll jobs fell 1.3 per cent in the fortnight up to 28 August, down 0.4 per cent from the previous fortnight according to the Australian Bureau of Statistics (ABS). Meanwhile, household wealth grew driven by residential property prices which recorded the strongest quarterly growth on record of 6.7 per cent.

Total household wealth increased 5.8 per cent at $735 billion in the June quarter reaching a record $13,433.7 billion according to ABS. Wealth per capita rose to a record high of $522,032. Residential property assets contributed 4.5 percentage points to the quarterly growth in household wealth, followed by superannuation balances and directly held shares, at 1.1 and 0.3 percentage points.

Company news

Resuming trade today, roads developer Transurban Group’s (ASX: TCL) has raised $2.9 billion through their institutional component in a bid to takeover WestConnex.

Brickworks (ASX:BKW) has booked a 20 per cent fall in after tax profits to $239.2 million for the year ending in July as costs related to its stake in Washington H. Soul Pattinson weighed.

Investment powerhouse Washington H. Soul Pattinson (ASX:SOL) is slated to reward investors with its highest dividend in 19 years, after its profits nearly doubled in the financial year 2021.

Broker moves – AGL & QBE

Ord Minnett upgrades AGL (ASX:AGL) to a buy with a price target of $7.55. The broker notes that the shares are trading below the estimated value for AGL Australia (Retail) alone which contributed to the rating upgrade but and lowered target price to $7.55 from $7.80. The company remains committed to separating its business into retail and generation (Accel Energy) by mid-2022. Ords sees strong corporate appeal in AGL Australia however there’s likely to be very little interest in Accel Energy. This is due to their exposure to coal, their leverage to wholesale prices and their sizeable rehabilitation costs. Shares in AGL (ASX:AGL) are surging 5.7 per cent higher at $6.00.

Ord Minnett rates QBE Insurance (ASX:QBE) as a buy with a price target of $14.55. The broker reviewed the potential economic losses due to earthquake in Victoria and believes the cost is likely to be around $138 million. They have not adjusted any of their forecasts. However, Ords considers Suncorp Group (ASX:SUN) would have greater risk than Insurance Australia Group (ASX:IAG) or QBE Insurance Group if it is a large event, via its higher maximum event retention. Shares in QBE Insurance (ASX:QBE) are trading 2.7 per cent higher at $11.50 while Suncorp Group (ASX:SUN) are trading 2.4 per cent higher at $12.46. Meanwhile, Insurance Australia Group (ASX:IAG) are trading 0.2 per cent higher at $4.88.

Futures

The Dow Jones futures are pointing to a rise of 121 points.
The S&P 500 futures are pointing to a rise of 12 points.
The Nasdaq futures are pointing to a rise of 22 points.
The SPI futures are pointing to a rise of 69 points when the market next opens.

Best and worst performers

The best-performing sector was Information Technology, up 3 per cent. The sector with the fewest gains was Health Care, up 0.2 per cent.

The best-performing stock in the S&P/ASX 200 was News Corporation (ASX:NWS), closing 8.4 per cent higher at $32.56. It was followed by shares in Whitehaven Coal (ASX:WHC) and Corporate Travel Management (ASX:CTD).

The worst-performing stock in the S&P/ASX 200 was Reliance Worldwide (ASX:RWC), closing 2.4 per cent lower at $5.30. It was followed by shares in Ramelius Resources (ASX:RMS) and Northern Star Resources (ASX:NST).

Asian markets

Japan’s Nikkei is closed.
Hong Kong’s Hang Seng has gained 0.7 per cent.
China’s Shanghai Composite has gained 0.2 per cent.

Commodities and the dollar

Gold is trading at US$1764.56 an ounce.
Iron ore is 16.8 per cent higher at US$108.70 a ton.
Iron ore futures are pointing to a rise of 1.9 per cent.
Light crude is trading $0.11 higher at US$72.34 a barrel.
One Australian dollar is buying 72.50 US cents.