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Earnings season in full swing: Star not starring

Daily Market Update

The benchmark S&P/ASX200 index eased 15.9 points, or 0.2 per cent, on Monday, to a three-week low of 7,417.8. The broader All Ordinaries fell 16.6 points, also 0.2 per cent, to 7,614.5, as earnings season moved into full swing.

Electronics retailer JB Hi-Fi reported an 8.6 per cent lift in sales to $5.3 billion for the six months to December 31, but the share market was more interested in the part of the report that said in January, sales grew just 2.5 per cent at JB Hi Fi’s 199 Australian stores, and were flat at appliance arm The Good Guys. That was enough to push JB Hi-Fi shares down $2.37, or 5.1 per cent, to $44.25.

Embattled casino group Star Entertainment plunged 39 cents, or 20.8 per cent, to an all-time low of $1.485 after announcing its first-half revenue was down one per cent from pre-COVID levels. Star Sydney revenue was down 13.5 per cent as it excludes more patrons and reduces complimentary services and benefits in private gaming areas following the scathing Bell Review and amendments to the NSW Casino Control Act.

  • In the heavyweight financial sector, Westpac retreated 14 cents, or 0.6 per cent, to $23.70; Commonwealth Bank was down 65 cents, or 0.6 per cent, to $109.30; ANZ eased one cent to $25.70; and National Australia Bank down 30 cents, or 1 per cent, to $31.38. But insurance companies had a good day after Insurance Australia Group announced that its net profit after tax climbed 170 per cent to $468 million, compared to a year ago. IAG rose 21 cents, or 4.5 per cent to $4.92; Suncorp gained 19 cents, or 1.5 per cent, to $13.01; and QBE was up 17 cents, or 1.3 per cent, to $13.40.

    Elsewhere, CSL gained 5 cents to $305.01, and Telstra closed 3 cents, or 0.7 per cent, stronger at $4.10.

    Market feels the energy

    Energy was the biggest sectoral gainer, rising 1.8 per cent as oil prices jumped on a proposed cut in Russian production. Woodside Energy was up 76 cents, or 2.1 per cent to $36.62, Santos rose 12 cents, or 1.7 per cent, to $7.07 and Brazilian-based producer Karoon Energy added 7 cents, or 3.2 per cent, to $2.23.

    In coal, Whitehaven Coal advanced 19 cents, or 2.5 per cent, to $7.93; New Hope Corporation was up 9 cents, or 1.7 per cent, to $5.40; Coronado Global Resources gained 7 cents, or 3.6 per cent, to $2.02; Yancoal Australia added 21 cents, or 3.9 per cent, to $5.66; Stanmore Coal was up 9 cents, or 2.6 per cent, to $3.57; and Terracom gained 2.5 cents, or 3.3 per cent, to 78 cents.

    Among the lithium cohort, producer Pilbara Minerals put on 7 cents, or 1.5 per cent, to $4.85, lithium project developer Lake Resources slipped 2.5 cents, or 3.4 per cent, to 70 cents; Liontown Resources lost 4 cents, or 2.8 per cent, to $1.40; and Piedmont Lithium, which has signed a deal to supply Tesla, shed 2.5 cents, or 2.6 per cent, to 94 cents.

    Among the big miners, BHP was down 13 cents, or 0.3 per cent, to $47.87; Rio Tinto lost 23 cents, or 0.2 per cent, to $122.32; while Fortescue Metals added 14 cents, or 0.6 per cent, to $22.14. Gold miner Newcrest slipped 20 cents, or 0.8 per cent, to $24.55, while rare earths producer Lynas retreated 42 cents, or 4.8 per cent, to $8.36.

    US markets up ahead of January CPI

    On the US markets, the blue-chip Dow Jones Industrial average added 377 points, or 1.1 per cent, while the broad S&P 500 climbed 46.9 points, or 1.2 per cent, to 4,137.4 and the tech-heavy Nasdaq Composite index rose 173.7 points, or 1.5 per cent, to 11,891.8.

    Microsoft led the Dow’s gains, advancing 3 per cent, with Nike, Salesforce and Intel also boosting the index.

    Investors are trying to anticipate Tuesday’s release of the January consumer price index (CPI) figure, hoping it shows that inflation is slowing amid the Federal Reserve’s rate hikes.

    In the bond market, US 10-year yields eased 3.6 basis points to 3.707 per cent, still inverted against the 2-year yield, which advanced 1.1 basis points to a new high for the year, at 4.524 per cent.

    Oil prices, a key inflation component, fell after a report that the Biden administration plans to sell more crude oil from the US Strategic Petroleum Reserve. West Texas intermediate crude slipped 37 cents, or 0.5 per cent, to US$79.35 a barrel, while the global benchmark Brent crude was down 38 cents, or 0.4 per cent, to US$86.01 a barrel. Gold is down US$4.88, or 0.3 per cent, to US$1,857.13 an ounce. The Australian dollar is buying 69.67 US cents this morning, up just over half a cent from 69.12 US cents at the Monday close in Australia.

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