Tech tumbles ahead of RBA policy meeting: ASX closes 0.1% higher

The Australian sharemarket finished the session firmer after a choppy day on the eve of the RBA policy meeting. The kick off saw the local bourse trade as low 0.4 per cent then as high of 0.1 per cent in the morning. Towards lunchtime, the index rose then fell with quite a bit of bumpiness between buying and selling till hope arose amid the US futures pointed to a brighter start.

The biggest pull was from the tech players which took its lead from the Nasdaq, tumbling 1.9 per cent after investors continued to climb the wall of worries around the Omicron variant.

Afterpay (ASX:APT) was a huge weight falling 4.3 per cent to $94 after its soon to be parent Block, formerly known as Square, sank over 5.0 per cent on Wall St. Adding to the pressure was news that its scheme meeting to vote on the acquisition by Square was adjourned until 14 December. Other buy-now pay-later darlings saw nothing but red. Sezzle (ASX:SZL) slumped 16.1 per cent to $3.17, Zip Co (ASX:Z1P) cratered 10.1 per cent to $4.34, while Splitit (ASX:SPT) fell 5.8 per cent to $0.24.

Outside the tech sector being the worst performing sector diving 2.2 per cent, communication services, materials, and healthcare also closed lower. Utilities was the best performer, lifted higher by APA (ASX:APA) surging 4.4 per cent at $9.85, followed by consumer staples thanks to Coles (ASX:COL) and Woolworths (ASX:WOW) rising 2.7 per cent and 2.6 per cent respectively. Energy stocks also rallied advancing 0.6 per cent despite the oil price softening overnight.

Across the major lenders, Commonwealth Bank (ASX:CBA) added 0.7 per cent, National Australia Bank (ASX:NAB) rose 0.3 per cent, Westpac (ASX:WBC) edged higher by 0.1 per cent while ANZ Bank (ASX:ASX) eked out a gain of 0.04 per cent.

The wealth platform space also got a hit with HUB24 (ASX:HUB) fell 4.4 per cent, while Netwealth (ASX:NWL) closed 1.7 per cent lower.

Mining giants fell with Rio Tinto (ASX:RIO) leading the fall, down 1.8 per cent, followed by BHP (ASX:BHP) by 1.6 per cent. Fortescue Metals (ASX:FMG) bucked the trend adding 0.3 per cent.

In M&A news, Boral (ASX:BLD) added 1.6 per cent after the building products manufacturer inked a deal to divest its North American fly ash business to Eco Material Technologies for $1.1 billion (US$775 million). The company is backed by US private equity investors One Equity Partners and Quadrant Management. Boral hasn’t determined how to return surplus capital from the sale to shareholders after allowing for reinvestment requirements. The sale is slated to be complete in financial year 2022 to allow for regulatory approval.

Metcash (ASX:MTS) impressed investors with their first-half financial year 2022 results that came in better than expected. The owner of IGA and Mitre 10 posted a 31 per cent increase in the first half dividend, bringing it to 10.5 cents per share. They posted a 3.0 per cent jump in net profit after tax at $128.8 million while group revenue rose 1.3 per cent at $7.2 billion. Metcash flagged that the strong trading momentum continued into the first five weeks of the second half of financial year 2022, with food, liquor and hardware sales all up from the same time a year ago. Shares lifted-off 7.3 per cent higher at $4.24.

Bapcor (ASX:BAP) tumbled 5.6 per cent at $6.41 after the car parts supplier brought forward the chief executive officer Darryl Abotomey retirement from February next year to effectively immediately citing a “marked deterioration in the relationship between the board and the CEO”.

Sigma Healthcare (ASX:SIG) sank 7.6 per cent at $0.485 after the owner of pharmacy brands Amcal and Guardian downgraded its guidance for financial year 2022 operating earnings to a contraction of 10 per cent from a reduction of 5.0 per cent previously. The downgrade was attributed to operational issues following the implementation of new systems, applications and products software with the impact on sales to continue into the financial year 2023 year.

At the closing bell, the S&P/ASX 200 was 0.1 per cent or 3.90 points higher at 7,245.

Local economic news

ANZ Australian job ads rose 7.4 per cent in November to a 13-year high of 222,093 available positions as restrictions eased further after the lockdowns were lifted in October. National employment fell in October against expectations of a rise, but this ANZ Job Ads result signals a strong rebound is imminent. Ads are up 52.5 per cent on a year ago and 44.2 per cent above pre-pandemic levels.

The Melbourne Institute monthly inflation gauge rose by 0.3 per cent in November to be up 3.1 per cent on the year. The ‘underlying’ or trimmed mean measure also lifted 0.3 per cent to be up 2.6 per cent on the year.

Futures

The Dow Jones futures are pointing to a rise of 229.00 points.
The S&P 500 futures are pointing to a rise of 23.00 points.
The Nasdaq futures are pointing to a rise of 19.50 points.
The SPI futures are pointing to a rise of 4 points when the market next opens.

IPOs

Australian Bond Exchange Holdings (ASX:ABE) has listed on the ASX today. Their shares issued at $0.65, started trading at $0.70 and closed at $0.53.

Newmark Property REIT (ASX:NPR) has also listed on the ASX today. Their shares issued at $1.90, started trading at $1.93 and closed at $1.92.

Larvotto Resources (ASX:LRV) has listed on the ASX today. Their shares issued at $0.20, started trading at $0.14 and closed at $0.14.

Best and worst performers

The best-performing sector was utilities adding almost 2.0 per cent while the worst-performing sector was information technology falling 2.2 per cent.

The best-performing stock in the S&P/ASX 200 was Metcash (ASX:MTS) closing 7.3 per cent higher at $4.24, followed by shares in Silver Lake Resources (ASX:SLR), and APA Group (ASX:APA).

The worst-performing stock in the S&P/ASX 200 was Zip Co (ASX:Z1P) closing 10.1 per cent lower at $4.34, followed by shares in Allkem (ASX:AKE), and Nearmap (ASX:NEA).

Asian markets

Japan’s Nikkei has lost 0.4 per cent.
Hong Kong’s Hang Seng has lost 1.3 per cent.
China’s Shanghai Composite has gained 0.2 per cent.

Commodities and the dollar

Gold is trading at US$1783.03 an ounce.
Iron ore is 0.2 per cent higher at US$98.50 a ton.
Iron ore futures are pointing to a rise of 1.48 per cent.
Light crude is trading $1.51 higher at US$67.77 a barrel.
One Australian dollar is buying 70.20 US cents.