Monday 21st March 2022
Market weakens as Ukraine impasse continues, Block surges, Qube announces buyback
Market weakens as Ukraine impasse continues, Block surges, Qube announces buyback
It was looking like another strong day for the market with the S&P/ASX200 trading positively throughout most of the session, but ultimately finishing 0.2 per cent lower.
US futures were the primary contributor with a growing impasse in negotiations between Ukraine and Russia blamed for the weakness into the close.
Just five sectors traded higher on the day with technology once again leading the way, Block (ASX: S2) shares gained 9.2. per cent after bond yields fell at the end of last week.
Iron ore has once again moved beyond US$150 per tonne, despite Chinese lockdowns, which supported BHP (ASX: BHP) and Rio Tinto (ASX: RIO) to outperform slightly.
Shares in Magellan (ASX: MFG) were weaker once again after CIO Hamish Douglass was removed from the board, likely only until he returns from mental health leave.
Wesfarmers (ASX: WES) gained 0.7 per cent after the Federal Court of Australia approved their takeover of Australia Pharmaceuticals (ASX: API); now comes the hard work to integrate and extract efficiencies.
Link deal nears completion, Alumina exports banned, AUD continues to rally
Despite fears that a tanking Australian dollar would contribute to an expected spike in inflation in Australia, the AUD has continued to rally throughout the Ukraine crisis, reaching 0.74 US cents last week and confounding many experts.
This has negatively impacted the likes of Northern Star (ASX: NST) and Newcrest (ASX: NCM) which fell 2.5 and 2.2 per cent with the AUD gold price moving lower.
Link (ASX: LNK) shares gained 1.2 per cent after private equity suitor Dye & Durham confirmed they will look to close the deal in June this year whilst also agreeing to seek the sale of their Banking and Credit Management division.
Qube (ASX: QUB) were also 1.3 per cent stronger after management confirmed their intention to return $400 million from the sale of their Moorebank terminal to shareholders.
It comes after several months of analysis to determine the most appropriate structure with retiree and zero-tax entities set to benefit most.
Shares in Alumina (ASX: AWC) fell 1.5 per cent after the Australian Government banned the export of Australian alumina to Russia, which represents close to 20 per cent of their annual requirements; the price of the commodity rocketed as a result.
Markets weaker, Boeing falls in China crash, Buffett acquires
The Federal Reserve has reintroduced uncertainty into markets with Jerome Powell confirming everyone’s worst fears that 50 basis point or 0.50 per cent rate hikes could be used if it is judged they are the only option to keep inflation under control.
Bond yields are telling many different stories today, with Powell highlighting that rate hikes don’t automatically result in a recession.
The markets finished lower, with both the Dow Jones and Nasdaq falling 0.6 and 0.4 per cent and the S&P500 0.04 per cent.
Interestingly the European markets have recovered all losses since the war in Ukraine.
Boeing (NYSE: BA) shares fell more than 4 per cent after a China Eastern flight on a 737 crashed into a mountain range, whilst the impasse in Ukraine is showing no signs of slowing.
Berkshire Hathaway (NYSE: BRK.A) is back on the hunt, announcing the acquisition of property reinsurance agency Alleghany (NYSE: Y) for US$11.6 billion.
There is talk that all of Europe will consider banning Russian oil imports, whilst India remains a buyer in Asia.
Drew is editor of The Inside Network's publications and a principal adviser at Wattle Partners.
