The local market reset record highs this week, with the ASX 200 closing on 7,295.4 points, up 1.6% since last Friday. Resources were the key theme this week, with stocks leveraged to energy, coal, uranium and iron ore all faring well, while gold shares tripped up.
Which shares excelled?
Sezzle (ASX: SZL) was one of this week’s biggest movers, flying on news of a major partnership in the US. Following a proof of concept trial, the BNPL company has landed a three-year agreement with retail giant Target Corporation (NYSE: TGT). Sezzle will launch its platform across Target’s online store, in addition to its physical stores across the US.
Surging coal prices have breathed new life into a rally in coal stocks, including the likes of New Hope Corporation (ASX: NHC), Whitehaven Coal (ASX: WHC) and Yancoal (ASX: YAL). Prices for the commodity have been on a tear of late, with thermal coal hitting a decade high. Demand has been climbing as industrial activity drives the global economic rebound. Supply out of China and Indonesia has also been dampened due to safety and weather issues respectively.
Energy shares were one of the strongest sectors this week, with a host of names gaining ground. Santos (ASX: STO), Origin (ASX: ORG), Oil Search (ASX: OSH), Woodside Petroleum (ASX: WPL) and Beach Energy (ASX: BPT) each had a stellar week. Oil prices continued their upwards march as data showed a larger-than-expected drawdown in crude oil inventories in the US, and OPEC committed to its output plans for the month ahead, a move seen as bullish in some quarters.
Elsewhere, hosting its Investor Day this week, engineering company Worley (ASX: WOR) won support from shareholders. The company announced that it is tracking well to deliver an improved performance in the second half of the current financial year. Thus far it has seen improved margins thanks to a lower cost-base, better gearing profile, swelling sales backlog, and its strategic transformation taking shape. With commodity prices also flying at the moment, the macroeconomic backdrop for the company is looming as a tailwind.
Capping off the commodities-led rally, uranium stocks gained ground as demand for the commodity continues to build. Although prices are a long way off historical levels, talk of a shortfall in supply has fuelled the gradual uptick, helping some stocks in this space hit multi-year highs, including Paladin Energy (ASX: PDN), which also began trading via US OTC markets this week.
Winners from other sectors this week included Inghams (ASX: ING), Pepper Money (ASX: PPM), Reece (ASX: REH), Temple & Webster (ASX: TPW) and Domino’s (ASX: DMP).
Which shares dragged on the market?
In contrast to other commodity stocks, which by and large had a fantastic week, gold shares were left behind as the price of the precious metal dipped back below US$1,900 per ounce. Leading the fall were Silver Lake Resources (ASX: SLR), Ramelius Resources (ASX: RMS), De Grey Mining (ASX: DEG) and Gold Road Resources (ASX: GOR), some of the more volatile stocks in this sector.
Mesoblast (ASX: MSB) shares were on the back foot this week, with the company’s trading update proving a headwind for the struggling share price. The company announced revenue of just US$1.9 million for the March quarter, down 84% on the prior corresponding period, albeit due to a one-off contribution recorded in the prior period. The company’s loss after tax of US$26.5 million for the quarter, and US$76.8 million financial year-to-date, didn’t sit well with shareholders, while updates on its various treatment programs failed to spur on buying support.
Elsewhere, shares in Tyro Payments (ASX: TYR) slipped as murmurs of a possible class action against the company continued to grow. While the payments business is looking to run a remediation program with retailers impacted by the outage of its payment devices earlier in the summer, it remains to be seen how many will settle through this avenue, as opposed to legal proceedings.
Link Administration Holdings (ASX: LNK) and Domain Holdings Australia (ASX: DHG) both stumbled through the week on the back of news regarding their interest in property conveyancing business PEXA. Link, as the major shareholder in PEXA, announced that it will list the company via IPO, while Domain, as part of a consortium that was looking to buy the business privately, will no longer bid for a stake in the business.
Last but not least, Imugene (ASX: IMU) and Appen (ASX: APX) found themselves on the list of worst-performers this week, having done well the week prior, while Nanosonics (ASX: NAN), Newscorp (ASX: NWS) and AMP (ASX: AMP) also dipped.
We’ll be back next week with another Weekly ASX Trading Wrap Up – until then, have a great week!
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