Australia’s share market is weaker but ongoing uncertainty around energy supply is boosting oil-linked stocks and offsetting weakness in the retail sector, as profit season continues.
The leading S&P/ASX200 index fell 22.3 points by midday on Monday to be down 0.26 per cent, to 9,091.1, as the broader All Ordinaries lost 16.4 points, or 0.18 per cent, to 9,296.8.
The local earnings season was heading into a busy week, especially for the resources sector, Moomoo market strategy consultant Greg Boland said.
“Investors will be looking beyond headline earnings to guidance, commodity prices, capital expenditure and dividend expectations,” he said.
“With the ASX trading near record levels, company results will be important in determining whether current valuations can be supported by stronger earnings growth.”
A gloomy household spending outlook continued to weigh on consumer discretionary stocks, which fell 2.5 per cent as JB Hi-Fi, Super Retail, Wesfarmers and Harvey Norman led a broad sector sell-off.
JB Hi-Fi was down more than 11 per cent and on track for its worst session since the beginning of the COVID-19 pandemic, after revealing Australian sales were contracting.
Materials stocks offered the index some support, with the segment up 1.6 per cent as gold and copper prices jumped, with gold trading at $US4,396 ($A6,195) an ounce.
BHP advanced one per cent to $61.95 ahead of its full-year results on Tuesday, with fellow mega-miners Rio Tinto and Fortescue showing similar gains.
Battery minerals producers continued to rebound in unison with recovering lithium prices, while rare earths producers also made gains.
The heavyweight financials sector was under pressure, tumbling as NAB shares dived almost five per cent despite its third-quarter update delivering a $1.8 billion statutory net profit, up almost a third on its average for the quarter.
Real estate stocks also sold off, led by a nearly nine per cent dump in LendLease shares after it cut its dividend and posted a $749 million loss, its fourth in five years.
The energy sector gained 0.8 per cent as Brent crude again topped $US89 a barrel, after the US promised to ratchet up economic pressure on Iran.
Woodside and Santos each rose roughly one per cent, with Santos to deliver financial results for the recent half on Wednesday.
In other earnings news, shares in market information provider Iress tumbled by almost a tenth despite the company’s net profit ballooning 85 per cent to $32 million.
Aurizon shares plummeted by a similar amount, despite delivering an in-line profit of $362 million.
Looking ahead, earnings from BHP, CSL, Cochlear, Evolution Mining and Northern Star are in the spotlight ahead of their results this week.
On Thursday, traders will be watching local employment data for a look under the hood of the Australian economy, with analysts split on the Reserve Bank’s road ahead on interest rates.
The Australian dollar was buying 70.97 US cents, up from 70.68 US cents on Friday at 5pm AEST.
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