Home / Daily Market Update / Trading volumes soft as ASX slides

Trading volumes soft as ASX slides

Daily Market Update

ASX falls as Afterpay spikes, Woolworths’ spin-off, retailers rally

The ASX 200 (ASX: XJO) fell 0.3%, the second straight day of losses, with consumer staples (+1.9%) and IT (+2.1%) the only real winners.

The majority of the selling pressure came from healthcare and energy, falling 1.8% and 1.2% respectively, with continued weakness in CSL Limited (ASX: CSL) dragging the index down.

  • The news of the day was Woolworths Group Ltd (ASX: WOW) successful spin-off or demerger of its Endeavour Group (ASX: EDV) business.

    Endeavour holds the popular Dan Murphy’s chain as well as the pub and pokie assets, with management seeking to distance themselves from these ‘sin stock’ operations.

    The Woolworths share price fell 11%, but in total less than $5, with shareholders receiving 1 new share in Endeavour for every Woolworths share held.

    Endeavour shares closed at $6.05, leaving investors better off by around 4.5%. Endeavour intends to continue with Woolworths’ dividend policy of paying out around 70-75% of profits.

    Sticking with dividends, Transurban Group (ASX: TCL), which owns pretty much any toll road worth owning in Australia, fell 0.7%, as Sydney lockdowns offset a 21.5 cent dividend announcement, which is a 30% improvement on 2020 levels.

    CIMIC wins Vic project, Afterpay expands into retail

    Engineering and construction business CIMIC Group Ltd (ASX: CIM) gained just 0.1% despite winning a 30-year contract from the Victorian Government to deliver a portion of the proposed North East Link.

    The $4 billion of work will include multiple tunnels but as recent events have shown, cost blowouts are common on these projects.

    The online retailing sector saw a massive rally on Thursday, Redbubble Ltd (ASX: RBL) adding 7.1%, Kogan.com Ltd (ASX: KGN) up 5.9%, and Afterpay Ltd (ASX: APT) up 6.2% after UBS released a survey suggesting lower-income workers were set to spur a massive increase in spending on services and goods, at least once lockdowns end.

    Afterpay was in the news for other reasons, with the share price continuing its recovery after the business announced its entry into delivering a two-way service.

    The group is set to offer a portion of its US users the ability to shop at a number of high-profile stores, including NikeAmazon, and Walmart, directly via its own app. Afterpay shares are now up 40% in June alone.

    US jumps on infrastructure stimulus, Tesla rally hits 10%, unemployment weaker

    US markets all jumped in unison behind the Dow Jones, which added 1%, the Nasdaq 0.7%, and the S&P 500 up 0.6%, with the latter two being more record closes.

    Today it was all about infrastructure stimulus, with President Biden announcing a pared back spending package totalling around US$600 billion which would be directed to the country’s ailing physical infrastructure, public transport, and water pipes.

    There were also positive signs for Tesla Inc (NYSE: TSLA) with charging stations an important plank of the package, sending shares 3.5% higher.

    Despite the seemingly expensive valuations of companies in the sector, including Caterpillar Inc (NYSE: CAT), industrial companies rallied most strongly.

    On the other hand, employment data was weaker than expected with unemployment benefits printing at 411,000, a slight improvement from 412,000 the week prior and worse than the 380,000 estimated.

    Finally, Alphabet Inc (NYSE: GOOGLE) confirmed they would be holding off on the banning of third-party cookies from their browser for several years; shares finished 0.3% higher.

    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