• The ASX 200 was up by marginally today, tracking Friday’s Wall Street returns 
  • Earning season continues on the ASX. Bluescope gains while Beach Energy is hammered
  • China’s data releases today suggest an economic downturn

 

The ASX 200 rose less than 1pc today, partially tracking the gains made on Wall Street last Friday. US shares rallied strongly to finish the week – with the S&P 500, Dow Jones and the Nasdaq rising between 1% and 2%.

Market optimism seems to be back on the agenda as investors grow more convinced the Fed can achieve a soft landing for the US economy, enabling it to avoid a recession.

Stephen Dover, Chief Market Strategist at the Franklin Templeton Investment Institute, said that forward-looking economic indicators do suggest that inflation may have peaked.

“If this occurs and the Fed interprets the economic data effectively, it can avoid overshooting and increasing the risk of a major recession,” said Dover.

But Dover said the Fed is keen to bolster its credibility as an inflation fighter, perhaps more than its concern of causing a recession.

“If the Fed doesn’t do enough, inflation might remain high—too much and the economy could move to recession, if it hasn’t already,” he added.

China meanwhile issued a slew of economic data today, pointing to a weakening in its economic recovery.

Industrial productions declined to 3.8% vs estimate of 4.3%, while retail sales grew at a slower-than-expected pace of 2.7%. The jobless in China fell to 5.4% from 5.5%.

Back to the ASX, lithium stocks continue to rally, driving the Mining sector higher. Tech and Real Estate however were the best performers, while Energy was the only sector in the red.

Beach Energy (ASX:BPT) dragged Energy lower today as its shares were hammered by 14% following an earnings miss.

In FY22, the Kerry Stokes-backed company reported a 39% increase in underlying profit after tax to $504m, but missed consensus forecast of $568m after production dipped 15% during the year.

Bluescope Steel (ASX:BSL) meanwhile, rose 6% as it enjoyed a 47.5% increase in revenue to $19.02 bn.

Underlying net profit was $2.81bn, a 135% increase on pcp and was the highest underlying annual profit in the company’s 20 year history.

 

BIG CAP WINNERS

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Carsales.com (ASX:CAR) rose 5% after posting $509 million of revenue, and $161 million in after-tax profit. The company also increased its fully franked final dividend to 24.5 cents a share.

Nearmap (ASX:NEA) became a $1bn market capped company again after its share price rose 24% following a takeover offer from private equity firm, Thoma Bravo.

Thoma Bravo offered to acquire 100% of the shares in Nearmap for $2.10 cash per share. The NEA share price closed at $1.51 on Friday.

Core Lithium (ASX:CXO) rose 10% on no specific news.

 

BIG CAP LOSERS

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Bendigo and Adelaide Bank (ASX:BEN) plummeted 8% after reporting only a 0.4% increase in net income to $1.71 bn, while its Net interest margin (NIM) fell 0.21% to 1.74%.