Tuesday 22nd March 2022
ASX rallies on commodities, Ramsay Asia under offer, Macquarie profit to surge
The Australian sharemarket continues to overcome weak sentiment, gaining 0.9 per cent to take the S&P/ASX200 to a two-month high.
The market is set to deliver the largest quarterly outperformance against the US S&P500 in a decade.
The biggest contributor was the commodities sector, with materials jumping 3.3 per cent behind a 5.1 per cent jump in BHP (ASX: BHP).
The iron ore price has continued to defy expectations with Ukrainian disruptions filtering through most markets.
The energy sector also outperformed, up 1.7 per cent whilst technology sold off following the threat of a 50 basis point rate hike in the US.
New Hope Coal (ASX: NHC) has been among the biggest beneficiaries of the energy crisis with the coal miner jumping 8.5 per cent after flagging expansions plans using the bumper $500 million in profits from the surging coal price.
A leading broker has also upgraded expectations for Macquarie Group’s (ASX: MQG) profit in 2022, expecting the group to lift revenue from energy trading and hedging by as much as $400 million; shares gained 1.3 per cent.
Ramsay Asia JV deal, Boral earnings hit by floods, consumer confidence slumps
Shares in Ramsay Healthcare (ASX: RHC) gained 1.3 per cent as the corporate activity around the business continues to grow.
The company disclosed they had received an offer to sell their joint venture operations in Asia to their business partner, for a valuation of US$1.35 billion.They have agreed to a period of exclusivity for further negotiations.
Boral (ASX: BLD) shares fell by more than 3 per cent after management unexpectedly delivered a small earnings downgrade.
The company reported a $23 million hit to earnings due to the impacts of extreme rainfall across NSW and Queensland.
They also highlighted the growing energy pressures with coal and diesel a key input into raw material production.
Consumer confidence has tanked amid the massive surge in fuel prices, falling by 4.8 per cent to the lowest level since before the COVID-19 vaccine was released.
Shares in Piedmont Lithium (ASX: PLL) were in a trading halt ahead of a planned capital raising on the US Nasdaq market.
Upward march continues, bonds continue to fall, Nike, Alibaba updates
Global markets have recovered from yesterday’s surprise admission that the Federal Reserve would be willing to combat inflation with 50 basis point rate hikes, putting them firmly in contractionary mode.
Bond markets continue to be among the hardest hit, particularly long duration government bond strategies, with the sharemarkets outperforming on signs the economy remains strong.
The Dow Jones added 0.7 per cent, the S&P500 1.1 and the Nasdaq 1.9 per cent with technology a key contributor.
Alibaba (NYSE: BABA) announced they would be extending their US$15 billion buyback to US$25 billion in a sign that management believes the share remains cheap; they gained more than 11 per cent on the news.
Nike (NYSE: NKE) has been struggling in recent months due to supply chain issues, falling sales in China and higher labour costs but reporting some improvement in their latest quarterly update.
Earnings continued to fall slightly, however, revenue was around 5 per cent higher as the company continues to pivot towards Direct to Consumer sales rather than the traditional retailing route; shares gained 2 per cent.
Drew is editor of The Inside Network's publications and a principal adviser at Wattle Partners.
