Home / Daily Market Update / ASX slides as Sydney outbreak spreads to Melbourne

ASX slides as Sydney outbreak spreads to Melbourne

Daily Market Update

Groundhog Day, markets down, unemployment falls, ARB’s run continues

The ASX 200 (ASX: XJO) weakened another 0.3% today as Victoria plunged into its fifth lockdown and the outbreak continued to extend in NSW.

Just two sectors finished higher, materials up 1.4% and utilities, 0.7%, with the latter benefitting from another 6.3% jump in Spark Infrastructure Group (ASX: SKI).

  • The poles and wires owner confirmed they had received an unsolicited takeover offer from private equity firm KKR and the Ontario Teachers’ Pension Plan, similar to one of our industry funds.

    Thursday also saw another fall in the unemployment rate to just 4.9%. However, beyond the great headline, underemployment is actually increasing up to 7.9% as hours worked also fell.

    Aftermarket parts seller ARB Corporation (ASX: ARP) continued its incredible run, jumping 7.2%, after flagging a 33.9% lift in revenue for the financial year with profit expected to be between $145 and $150 million.

    Both management and brokers are now struggling to understand how the company performs in a post-pandemic, open-border environment.

    China GDP ‘falls, Pendal outflows continue as Australian Ethical jumps 50%, Woodside benefits from higher oil price

    Headlines suggested that China’s GDP had halved since the previous quarter, yet the massive economy delivered a 7.9% quarterly growth rate, taking the full year recovery to 12.7%.

    Manufacturing continues to power the economy, jumping 17.1% as global demand begins to improve.

    Woodside Petroleum Limited (ASX: WPL) benefited from an extended recovery in the oil price despite weak demand remaining, with revenue up 15% to $1.3 billion despite a fall in production and volume exported. WPL shares finished down 1%.

    Value manager Pendal Group (ASX: PDL) reported another $700 million in outflows, the majority of which are coming from their institutional business.

    The ESG-styled Regnan ‘Impact’ strategies were a rare winner, receiving $300 million in new investments, but the group ultimately added $5 billion in assets to $106.7 billion as market performance remained strong. Pendal shares were 1.9% higher.

    Sticking with asset managers, Australia’s leading ESG manager, Australian Ethical Investment Limited (ASX: AEF), reported a 12% increase in assets under management to $6.07 billion in the June quarter, delivering a record of $1 billion for the year, for total growth exceeding 50%. AEF shares added 0.8%.

    Markets fall, TSMC weakens, but the Fed remains dovish

    US markets were mixed once again, with the Dow Jones the lone gainer, adding 0.2%, as the Nasdaq and S&P 500 were pushed lower, 0.7% and 0.3% respectively, by the big tech names.

    The energy, consumer, and technology names were among the largest detractors including Amazon Inc. (NYSE: AMZN) which fell 1.4%.

    The weakness came as the Federal ReserveChair came under pressure from the US Senate, suggesting oversight of Wall Street banks had been reduced.

    That said, the continued conservative views of Jerome Powell is now suggesting that economic growth rates may have already peaked, sending bond rates lower.

    Taiwan Semiconductor (TPE: 2330), which is among the most important companies in the world, delivered another strong update, albeit with profit slightly below expectations jumping 11% on the back of 20% growth in revenue.

    The company makes computer chips for the likes of Apple and Intel, of which around 42% of their revenue comes from smartphones and 39% from high-performance computing. They highlighted the likelihood that the current shortage will extend into 2022, with shares up just 0.2%.

    Industrials, property push ASX lower, RBA hikes again, Woolworths guides to higher sales

    The local market fell sharply on the back of an unexpected 0.25 per cent interest rate increase by the Reserve Bank of Australia. The news took the cash rate to 3.85 per cent, adding more pressure to household balance sheets and came despite most experts suggesting hikes had come to an end. The hardest hit…

    Drew Meredith | 3rd May 2023 | More
    ASX boosted by the energy sector, Origin upgrades outlook, Best & Less gets a bid

    The local sharemarket finished 0.4 per cent higher on Monday, buoyed by the energy and utilities sectors, which gained 1.3 and 1 per cent, despite the oil price continuing to fall. The sector was buoyed by an earnings upgrade from Origin Energy (ASX:ORG) which sent shares 0.5 per cent higher with AGL Energy (ASX:AGL) also…

    Drew Meredith | 2nd May 2023 | More
    Upbeat start to week – and month – likely for Aussie market

    After a strong session for global markets on Friday, Australian shares will take a positive lead into the new week – and month. The Australian benchmark index, the S&P/ASX 200, added 16.5 points, or 0.2 per cent, on Friday, to 7,309.2, but eased 53 points, or 0.7 per cent over the week. ASX futures trading…

    James Dunn | 1st May 2023 | More