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By Lucy Battersby
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This was published 4 years ago
As it happened:Miners, banks drive ASX gains 0.9% to nine-week high
Summary
- The S&P/ASX 200 gained 62.5 points, or 0.9%, to 7341.1 points. Miners, financials, and energy companies were higher, with heavyweight BHP gaining 5.1%, it’s biggest one-day gain in 14 months
- Wall Street futures are down by 0.4% for the S&P500 and Nasdaq minis, and down 0.2% for the Dow Jones mini. Overnight, the S&P 500 closed flat, down 0.1%, Dow Jones declined by 0.6%, and the technology-heavy Nasdaq dropped by 0.4%
- Brent crude is up 2.3% in Asian trade to $US118.25 a barrel while US oil is up 1.5% today to a two-week high of $US113.76 per barrel
- Iron ore softened by dropping 0.1% to $US150.47 per tonne (Tianjin)
Market Wrap
By Colin Kruger
The ASX 200 rose to a two-month high of 7377.3 on Tuesday despite the US signalling more aggressive rate hikes, as rising commodity prices underpinned the market’s attractiveness amid rising global tensions and inflation.
The benchmark S&P/ASX 200 closed 0.9 per cent higher, up 62.6 points to 7341.1. Energy was a big contributor after oil continued its surge with Brent crude rising to nearly $US120 per barrel again as the European Union indicated it may be edging closer to a ban on Russian crude imports.
Coal miner New Hope Group put a spotlight on what a boon it is for all of Australia’s energy players with its shares up as much as 10 per cent after reporting a 700 per cent rise in half-year profit and lifted its dividend from 4c to 30c as the price the company received for its coal more than doubled.
Australia’s miners did the heavy lifting with the materials sector up 3.3 per cent, and the Aussie dollar has also benefited, as commodities become a safe haven in a world of high inflation and shortages. BHP closed 5.1 per cent higher on a day which saw all the big miners rise strongly. The Aussie dollar hit a three-year high of ¥88.89.
ASX gains 0.9% amid commodities rally
By Lucy Battersby
The S&P/ASX 200 has closed at a nine-week high after rising 0.9 per cent, or 62.5 points, to 7341.1. It comes as oil prices returned to two-week highs with US crude at $US115.01 and Brent crude again nudging $US120 a barrel.
BHP had it’s biggest one-day gains since January 21, rising 5.1 per cent to $48.82, which added 40.6 points. Rio Tinto gained 3 per cent and South32 gained 3.1 per cent.
Information technology declined with Block Inc down 5.1 per cent, Xero down 2.6 per cent, and WiseTech down 1.1 per cent.
Biggest gains
- Liontown Resources up 6.3%
- AVZ Minerals up 5.8%
- BHP Group up 5.1%
- Mineral Resources up 4.9%
- Allkem up 4.7%
Biggest declines
- Atlas Arteria down 5.3% (ex dividend)
- Block Inc down 5.1%
- Life360 down 4.8%
- Zip Co down 4.1%
- Magellan Financial Group down 3.8%
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Russia’s financial meltdown has China’s attention
By Jeremy Warner
Russia first; next stop China. If American, British and European multinationals can quit Russia in protest at Vladimir Putin’s murderous assault on Ukraine, should they not also be considering their position in China, which is tarred with much the same autocratic brush as Russia and in some respects carries a similar degree of geopolitical risk?
For Ukraine read Taiwan, and for Russian paranoia about NATO’s eastward expansion, look to Beijing’s ever more aggressive pursuit of its own supposed sphere of influence in the East and South China Seas.
It is impossible to know for sure whether Putin told China’s Xi Jinping of his intentions when they signed their “no limits” partnership on the eve of the Winter Olympics in Beijing.
The answer is as unknowable as whether the COVID virus emanated from a Wuhan lab. Yet Beijing could see the military build-up on Ukraine’s borders as well as any. It is hard to believe the matter wasn’t even mentioned. Putin would have wanted reassurance that Xi was on side. Xi would in turn no doubt have partially believed Putin’s assurances that the land grab would be a walk in the park.
Yet for Xi, Putin’s adventurism would also have been seen as a way of testing Western resolve, a useful war-gaming of his own designs played out at someone else’s expense. Xi would sit on the sidelines and see how things worked out. You go first, as it were, we’ll be right behind you... not.
‘Wrong and unacceptable’: Star boss fury over damning money laundering report
By Patrick Hatch
The Star Entertainment Group’s chief executive Matt Bekier furiously rejected a damning report that found his casino outfit was failing to address money laundering risks, before the group erroneously claimed legal privilege to hide it from the financial crimes watchdog.
Mr Bekier slammed the KPMG report onto a desk at a meeting of the company’s audit committee in May 2018, declaring it was “wrong” and “unacceptable”, the inquiry into its Sydney casino licence heard on Tuesday.
KPMG’s report detailed how The Star was falling short of its anti-money laundering and counterterrorism financing obligations (AML CTF). All customers were considered “low risk” by default and gamblers could bring as much as $200,000 cash into the casino without automatically being classified as “high risk”.
The casino was failing to conduct due diligence on ultra-rich high-rollers playing on “junket” gambling tours and there was no inquiry into where the millions of dollars they gambled came from, the report found.
Russia’s stock exchange reopens for business but it’s anything but usual
By Stephen Bartholomeusz
Russia has taken the first tentative step towards reopening the domestic financial markets that were shut down the moment the West imposed an unprecedented set of sanctions on its economy in response to the invasion of Ukraine.
The Moscow Stock Exchange reopened for business on Monday, albeit not for trading in equities, which remains suspended. Instead there was limited trading in Russia’s domestic, rouble-denominated, bonds.
Before trading started yields on 10-year Russian government bonds were being quoted at almost 20 per cent but once trading resumed they fell back to “only” 13.9 per cent, almost two percentage points higher than before the market’s closure on February 25. The 10-year bonds later traded with yields above 14 per cent and the yield on two-year bonds more than 15 per cent.
The relatively calm reopening probably owed much to Russia’s central bank interventions.
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CBA eases from four-month highs
By Lucy Battersby
Australia’s financial sector is up 1.2 per cent today with strong gains across the big banks and insurers.
Bendigo and Adelaide Bank is up 1.8 per cent, Suncorp is up 1.6 per cent, NAB is up 1.4 per cent, and Westpac is up 1.2 per cent.
Commonwealth Bank was back at four-month highs of $107.30 this morning, but the gains have eased this afternoon for the stock to be 1 per cent higher are $106.78.
These moves follow a report from Macquarie’s equities analyst team predicting earning upgrades from the banks in 2022-23 due to rising interest rates. Overnight, US Federal Reserve Chair Jerome Powell said the central bank would raise its benchmark short-term interest rate faster than expected, and high enough to restrain growth and hiring, if it decides this would be necessary to slow rampaging inflation.
Spending on going out up in second year of the pandemic
By Rachel Clun
Australians splashed more cash through the year on new clothes and shoes, culture, and dining out as states eased COVID restrictions in the 12 months to January 31, 2022.
Spending data from the Australian Bureau of Statistics found household spending increased by 4.3 per cent to January this year compared to the year before, with the biggest increases in recreation and culture, up 11.3 per cent; food (up 9.7 per cent) and clothing and footwear (up 9.6 per cent).
Head of Macroeconomic Statistics at the ABS, Jacqui Vitas, said spending only fell in two categories: alcohol and tobacco (down 10.6 per cent) and furnishings and household equipment (down 4 per cent).
“Eased COVID-19 restrictions in January 2022 across most states saw consumers shift spending from their homes to hospitality and retail venues,” Ms Vitas said.
But spending is still lower than pre-pandemic levels, down 0.6 per cent in January 2022 compared to January 2020.
As the Omicron wave hit Australia hard across summer, spending dipped below highs seen in November 2021 across all spending categories except for food.
ASX200 hits nine-week high
By Lucy Battersby
The ASX200 is up 1.1 per cent half-way through today’s session. It has gained 82.6 points and risen to a nine-week high of 7369. There are 117 companies higher, 80 lower, and a handful unchanged.
The materials sector is out-performing followed by financials, while information technology and real estate are dragging.
BHP is still up over 4.5 per cent, Rio Tinto is up 3.2 per cent, and Fortescue is up 1.4 per cent thanks to rising ore prices. Commonwealth Bank is up 1.2 per cent, National Australia Bank is up 1.3 per cent and Macquarie Group has gained 1.9 per cent.
Meanwhile, oil prices are creeping upwards again with Brent crude futures trading for $US118.39 today, the highest it has been since 9 March. West Texas Intermediate crude futures are at $US114.33, the highest price since 10 March.
This is supporting ASX-listed oil producers with Woodside Petroleum up 2.2 per cent and Santos up 1.7 per cent. Uranium explorer Paladin Energy hit a two-month high of 91.5¢ when it jumped 10.2 per cent.
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Forrest to set sail in the deep green sea
By Peter Milne
Fortescue green energy subsidiary Fortescue Future Industries (FFI) has paid ASX-listed MMA Offshore $10.5 million for a diesel-powered oil and gas supply ship it plans to convert to green ammonia as well as diesel.
The purchase is another move in Andrew Forrest’s plan for FFI to produce 15 million tonnes of green hydrogen a year by 2030.
The clean fuel made by separating hydrogen from water with renewable energy is difficult to store and transport, so the more easily managed hydrogen product ammonia is a favoured marine fuel of the future.
The MMA Leveque is a 75m-long Singapore-flagged platform supply vessel built in 2010 and powered by four Cummins diesel electric engines. FFI’s fuel conversion plans were first flagged in November last year.
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