ASX Trading Wrap: Local market fails to draw inspiration from US tech giants

ASX Trading Wrap: Local market fails to draw inspiration from US tech giants

Despite US mega-tech names delivering blowout earnings reports this week, and US indices touching  new highs, the Australian share market ended the week lower thanks to today’s pull-back. The ASX 200 closed on 7025.8 points, 0.5% lower than last Friday’s close.

Weighing on the market this week were gold stocks, as well as travel shares and supermarket names, but there were a handful of strong performers this week from a number of industries.

 

Which shares excelled?

After an ordinary performance the week prior, Temple & Webster (ASX: TPW) shares rebounded strongly this week, up a total of 14% despite a pull-back today.

A positive trading update from NIB Holdings (ASX: NHF) sent a rocket under its share price, with the health insurer gaining 14.7%. Reporting its financial year-to-date details earlier in the week, NIB announced a 3.7% increase in health insurance policyholders versus FY20, while claims have been lower than anticipated. On the back of expected strength in the second-half, management believes earnings will be significantly higher than last year, guiding for $200 million to $225 million in underlying operating profit.

Buy-now pay-later platform Sezzle (ASX: SZL) was also on the winners list this week as it unveiled plans for a US IPO. The company intends to file a registration statement with the U.S. Securities and Exchange Commission (SEC), which would allow it to raise funds in its local market, and hot on the heels of its partnership with product broker and marketer, Market America Worldwide. 

Despite recently pushing through price hikes, high demand for protective gloves continues to spur on Ansell (ASX: ANN), as the company reported yet another earnings upgrade this week. In its latest revision, management now expects FY21 earnings per share to be as much as 20% higher than previously thought just two months ago. Shares in ANN leapt 8.2% this week.

Following protracted negotiations over recent months, a formal takeover bid was finally lobbed at waste management company Bingo Industries (ASX: BIN). Macquarie Infrastructure and Real Assets has won approval from Bingo’s board in relation to its $2.3 billion offer, equal to a cash price of $3.45 per share or an alternative offer of cash and unlisted scrip in continuing operations. 

Elsewhere, Sandfire Resources (ASX: SFR) touched a two-year high following an upbeat quarterly report. With copper prices hitting a decade high, sentiment has been building strongly, however, the miner also anticipates it will hit the top-end of its production guidance, while keeping costs steady in FY21.

Some other names in the green this week were Viva Energy Group (ASX: VEA), Virgin Money UK (ASX: VUK), Cimic Group (ASX: CIM) and Orocobre (ASX: ORE).

 

 

Which shares dragged on the market?

Beach Energy (ASX: BPT) shed more than a fifth of its market cap today after the oil producer issued a guidance downgrade to the market. As part of its third-quarter results for FY21, the company announced that production was 15% lower than a year ago due to natural field decline, reduced reservoir performance and lower customer nominations. 

Higher revenue on the back of surging oil prices was overshadowed by the company downgrading its oil reserve estimates, leading it to withdraw its five-year guidance, starting with a hit to FY21.

Two other victims of their own quarterly reports were Nickel Mines (ASX: NIC) and St Barbara (ASX: SBM). The duo slumped 10.2% and 11.3% respectively after the market viewed their results as disappointing. 

In the case of Nickel Mines, lower sales and higher production costs dampened sentiment, while its cash, receivables and inventory had slumped nearly 50% after accounting for payments to shareholders and in relation to existing debt and its stake in the Angel Nickel RKEF.

For St Barbara, production was lower by 8.2% versus the prior quarter, while all-in sustaining costs (AISC) rose by a similar amount. With gold sales slumping almost 30%, investors were hoping for reasons to be optimistic, however, the worsening COVID crisis in Papua New Guinea has hamstrung the company and clouded guidance.

Other gold names were also in the doldrums this week as gold prices gently drifted lower. While the whole sector felt the pinch, among those most-impacted were AngloGold Ashanti (ASX: AGG), Ramelius Resources (ASX: RMS), Northern Star Resources (ASX: NST) and Newcrest Mining (ASX: NCM).

There was also some weakness among supermarket duo Woolworths (ASX: WOW) and Metcash (ASX: MTS). Although the former released quarterly results that, on the surface appeared to outperform its major rival in Coles (ASX: COL), it appears that investors have rotated away from Woolworths and Metcash, each trading near all-time highs, to buy into beaten-down Coles.

Travel stocks were on the back foot this week as the euphoria in this segment eases now that the timeline of the local vaccine roll-out has been extended, and COVID spirals out of control in India, seemingly quashing any hopes of an international restart later this year. Shares in Corporate Travel Management (ASX: CTD) sunk 8.8%, while Flight Centre (ASX: FLT) also took a hit.

Finally, it was a tough week for shareholders in the likes of Zip Co (ASX: Z1P), JB Hi-Fi (ASX: JBH), Mesoblast (ASX: MSB), Link Administration (ASX: LNK), De Grey Mining (ASX: DEG) and Nuix (ASX: NXL), which each recorded a sliding share price.

 

We’ll be back next week with another Weekly ASX Trading Wrap Up – until then, have a great week!

 

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