- China slips into deflation
- Strong results from the CBA pushed bank stocks higher
- Beach Energy announced CEO’s surprise exit and new CEO
Local shares lifted 0.35% today as traders weighed reports of Moody’s downgrade on US regional banks against China’s CPI data.
China slipped into deflation as CPI fell 0.3 points in July after flatlining in June.
“The worry for investors is that the effect of deflation in the world’s second-largest economy has global repercussions,” said Josh Gilbert, a market analyst at eToro.
But Gilbert said the silver lining is that it might be enough to prompt a response from Chinese policymakers.
He warned, however, that what happens in China has repercussions for Australia.
“Australian miners could see some hardship if a period of deflation prolongs, given it would drive China’s demand for raw materials down, amongst other areas such as energy and even Australian-grown produce,” Gilbert said.
On the ASX today, Financials stocks over-performed following CBA’s strong full-year results (see more details below).
“Net interest margins have peaked for Australia’s biggest bank as local competition intensifies, and the focus now will be on how far they decline in 2024,”warned Gilbert.
Healthcare and Real Estate sectors meanwhile slipped, while the AUD traded down to a two-month low at US65.5c.
BIG CAP WINNERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| CBA | Commonwealth Bank. | 105.16 | 2.89 | 1,730,337 | $171,321,266,402 |
| NAB | National Aust. Bank | 28.61 | 2.05 | 3,282,229 | $88,000,483,043 |
| WBC | Westpac Banking Corp | 22.13 | 1.91 | 3,471,143 | $76,182,060,802 |
| SEK | Seek Limited | 25.69 | 2.49 | 880,567 | $8,926,877,961 |
| EVN | Evolution Mining Ltd | 3.77 | 2.17 | 3,996,587 | $6,771,210,217 |
| NXT | Nextdc Limited | 13.10 | 1.87 | 490,374 | $6,618,355,739 |
| WHC | Whitehaven Coal | 7.13 | 2.15 | 3,737,725 | $5,839,473,472 |
| IPL | Incitec Pivot | 3.06 | 2.52 | 2,736,138 | $5,787,830,586 |
| NHC | New Hope Corp | 5.54 | 1.84 | 2,252,618 | $4,597,909,319 |
| PMV | Premier Investments | 21.82 | 1.75 | 225,489 | $3,413,776,260 |
| BFL | Bsp Financial Group | 5.85 | 4.46 | 15,844 | $2,616,431,882 |
| CRN | Coronado Global Res | 1.52 | 4.47 | 2,416,833 | $2,439,240,177 |
| IVC | InvoCare Limited | 12.46 | 5.77 | 1,295,527 | $1,697,035,435 |
| NAN | Nanosonics Limited | 4.82 | 3.33 | 691,523 | $1,408,791,442 |
| RRL | Regis Resources | 1.59 | 1.60 | 2,146,582 | $1,177,930,822 |
| BOE | Boss Energy Ltd | 3.13 | 1.95 | 1,609,976 | $1,083,361,761 |
Commonwealth Bank (ASX:CBA) rose almost 3% after posting a full-year profit of $10.16 billion, a record for the bank.
This was driven by a 11.4% growth in business lending and stronger margins, with NIM (net interest margins) increasing by 17bp to 2.07%. CBA will pay a final dividend of $2.40 a share, taking the total dividend for the year to $4.50.
Syrah Resources (ASX:SYR) jumped 4% after announcing that it signed an MoU with Korea’s Samsung SDI over a potential graphite deal .
Funerals house Invocare (ASX:IVC) jumped after agreeing to be acquired by private equity group TPG following a five-month pursuit.
BIG CAP LOSERS
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| Code | Name | Price | % Change | Volume | Market Cap |
|---|---|---|---|---|---|
| RMD | ResMed Inc. | 27.52 | -4.28 | 8,887,103 | $12,268,673,225 |
| CHC | Charter Hall Group | 10.52 | -3.13 | 1,033,698 | $5,136,749,581 |
| CLW | Chtr H Lwr | 3.65 | -3.95 | 4,001,059 | $2,747,230,771 |
| VUK | Virgin Money Uk PLC | 3.28 | -3.39 | 2,171,844 | $2,351,156,769 |
| LOV | Lovisa Holdings Ltd | 20.15 | -4.86 | 561,844 | $2,283,878,858 |
| CHN | Chalice Mining Ltd | 5.58 | -2.11 | 1,097,556 | $2,210,016,415 |
| CQR | Charter Hall Retail | 3.60 | -2.17 | 657,973 | $2,138,924,961 |
| HMC | HMC Capital Limited | 4.95 | -2.47 | 1,228,927 | $1,762,398,204 |
| SGR | The Star Ent Grp | 0.95 | -4.55 | 11,587,583 | $1,602,494,068 |
| AZS | Azure Minerals | 2.74 | -4.37 | 5,648,504 | $1,116,075,166 |
| CTT | Cettire | 2.79 | -2.45 | 1,535,690 | $1,090,341,309 |
| CQE | Charter Hall Soc In | 2.80 | -1.93 | 537,223 | $1,053,132,393 |
Beach Energy (ASX:BPT) fell after the surprise exit of CEO Morné Engelbrecht, who’s been replaced by Brett Woods. Woods has over 25 years of experience in upstream oil and gas including most recently 10 years at Santos, where he undertook a number of executive roles including Chief Operating Officer.
Suncorp (ASX:SUN) fell after reporting a 2.8% increase in full-year net profit to $1.2 billion, which missed analysts’ estimates.