Australian shares ended the week slightly lower, with the negotiating deadlock in the US regarding fiscal stimulus proving a hurdle. Some of the ASX’s most-prominent online retailers were sold off sharply, with profit taking and weaker-than-expected retail sales data weighing down the consumer discretionary sector. The benchmark ASX 200 slipped 9.8 points this week to 6,167 points, a decline of 0.2% across the week.
Which shares excelled?
Dicker Data (ASX: DDR) was one of the week’s top-performing shares thanks to its latest trading update. The company, which is a specialist IT hardware and software distributor, reported that total revenue in the first nine months of the year was up 15% on last year’s comparable period.
Meanwhile, Dicker Data’s profit across the same timeframe leapt 28.3% to $60.8 million. Shareholders were also encouraged by the company’s outlook, with management touting 5G as a potential tailwind for the business. DDR shares gained 16.5% this week.
Nickel Mines (ASX: NIC) was on the move for the second week in a row, jumping 9.6%. The move came after the company last week informed the market that it would take a 70% stake in an Indonesian nickel project, where it will gain exposure to 36,000 tonnes in annual production capacity of nickel metal.
Finishing the week on a high note was Bluescope Steel (ASX: BSL), which on Friday morning updated the market on expected earnings for 1H FY21. The steel products manufacturer anticipates that underlying EBIT will come in at $340 million, a 30% improvement on the last half. Management cited improving conditions in its key geographic markets, led by the likes of Australia and Asia. The stock finished the week 9.2% higher.
A week after announcing another contract win in the European market, Pro Medicus (ASX: PME) featured high on the winners list. The radiology software provider secured a 7-year deal with one of Europe’s largest hospitals for the supply of its Visage 7 technology, which will replace the hospital’s existing radiology and imaging systems.
Among other high-profile names on the march higher this week were Challenger (ASX: CGF), Orora (ASX: ORA), Qantas (ASX: QAN), Sims (ASX: SGM) and Cimic Group (ASX: CIM).
Despite Qantas flagging a $100 million impact on its earnings in the first quarter of FY21 due to delayed border openings, the company is targeting $1 billion in ongoing cost savings by FY23, including $600 million in the current financial year. The airline also expects domestic capacity to reach 50% by Christmas as state borders reopen, and it remains hopeful of additional travel bubble arrangements with countries in Asia next year.
Which shares dragged on the market?
Following the de-merger of what is now Australia’s largest resource royalties company in Deterra Royalties (ASX: DRR), the share price of Iluka Resources (ASX: ILU) was adjusted to reflect the major separation in revenue and earnings. Deterra is leveraged to iron ore royalties from BHP’s South Flank operations in Western Australia, where it provided $85 million in revenue to Iluka throughout 2019. The spin-off company is now looking to diversify its royalties portfolio.
Despite declaring that its profit in the September quarter was greater than that of all of FY20, Temple & Webster (ASX: TPW) shares were savaged this week, to the tune of 22.3%. Sales showed triple-digit growth year-to-date, however, with the stock surging significantly in recent months, shareholders were quick to sell into the news.
The negative sentiment, as well as a contraction in September’s preliminary retail sales data across Australia, also flowed through to fellow market darlings, Kogan (ASX: KGN) and Redbubble (ASX: RBL), which shed 11.2% and 13.2% respectively.
In somewhat similar circumstances, Megaport (ASX: MP1) shares also tumbled despite the company reporting an increase in customers and ports across the September quarter. With the company’s operational expenditure weighing on its cash balance, selling pressure contributed towards an 11.2% slide in Megaport’s share price.
Last but not least, gold stocks also weighed on the market this week, with Resolute Mining (ASX: RSG), Regis Resources (ASX: RRL), De Grey (ASX: DEG) and Perseus Mining (ASX: PRU) headlining some of those that struggled to find their feet this week.
We’ll be back next week with another Weekly ASX Trading Wrap Up – until then, have a great weekend!
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