The Australian sharemarket romped higher after tech sector strength combined with an impressive half-year report from Commonwealth Bank.
Following a positive Wall Street lead, the benchmark S&P/ASX200 index strengthened 1.13 per cent to 7268.1, while the All Ordinaries Index improved 1.12 per cent to 7572.6.
OMG chief executive Ivan Tchourilov said the ASX had a solid initial bounce, weakened towards the middle of the session, then climbed steadily to rack up two straight days in the green after a slight slip on Monday.
“We’re also seeing stability in international markets; however, investors should watch for US inflation data being released over Thursday night,” he said.
“Equities and bonds are again separating in expectation of the data, and investors should be reminded not to fall into a false sense of security after a rosy start to February.
“It may be time to count your blessings.”
CommSec said the local bourse had recouped two-thirds of January’s significant losses in just seven days, with analyst Steven Daghlian describing trade on Wednesday as “scattered”.
He noted his employer had been the big driver of the gains, with CBA’s six month profit exceeding analyst expectations by about $240m, in no small part thanks to reduced loan loss provisions.
The positives in the report were enough to offset softer margins and competition, Mr Daghlian said.
CBA declared an interim dividend of $1.75 per share, fully franked, and announced a $2bn on-market share buyback.
“Net profit after tax is up 21 per cent despite the group’s margin falling 17 basis points,” Mr Tchourilov said.
“That’s partly owed to CommBank’s streamlined operating model, shaving 35 per cent from the cost-to-income ratio.
“Interest margins on their cash also increased 7 basis points, which were compounded by an 8 per cent increase in deposits.
“CommBank is holding firm on its call for an August rate hike, despite continued comments from the RBA touting a hike next year.”
The bank’s sharesxjmtzyw jumped 5.58 per cent to $99.56 and its big four rivals joined in on the buoyancy.
ANZ rose 1.7 per cent to $27.42, National Australia Bank gained 2.38 per cent to $28.39 and Westpac put on 2.43 per cent to $22.38.
Share registry service Computershare bumped up the technology index, which was the best performer ahead of financials.
Computershare soared 11.24 per cent to $22.17.
“This is after it handed down its half-year results after the market closed yesterday, where it had a 27 per cent lift in profits,” Mr Daghlian said.
“This was ahead of market consensus and this was the first chance for investors to react to that result.
“It also raised its guidance for the year as well.”
Another big mover was hardware and software wholesaler Dicker Data, which surged 7.76 per cent to $14.59 after declaring a final dividend for fiscal 2021 of 15 cents per share fully franked, with full-year results due on February 28.
“On the other end, poor reporting from Minerals Resources dragged the resources index down, compounded by Syrah Resources dipping after raising capital at a discount,” Mr Tchourilov said.
“China also released comms citing a crackdown on iron ore prices after allowing the costs to run higher through the end of 2021 until now.”
MinRes booked a substantial net loss for the first half, blaming a “collapse in iron ore prices and widening discounts”, deciding against paying out an interim dividend in light of volatile market conditions for the steelmaking commodity.
Shares in the miner tumbled 8.92 per cent to $52.72, while Syrah, a graphite producer, slumped 11.2 per cent to $1.46 – below the price of its share offer, which raised about $125m.
Rio Tinto eased 0.56 per cent to $116.53, BHP fell 1.69 per cent to $48.32 and Fortescue slid 3.6 per cent to $21.43.
Commercial real estate investor BWP Trust booked a small gain in half-year revenue but gains in the fair value of its investment properties rocketed 235 per cent.
Its shares eased 0.25 per cent to $4, however.
Temple and Webster booked record first half revenue amid rising customer numbers and spending, with chief executive Mark Coulter saying the business had “more than tripled in two years” despite Covid-related supply chain woes.
RBC Capital Markets analyst Wei-Weng Chen was impressed, saying the online-only homewares and furniture retailer’s second half should benefit from continued, encouraging housing and renovation market trends.
Temple and Webster leapt 9.69 per cent to $8.83.
“Early on during the pandemic, it was certainly one of the strongest performers on the Aussie market, selling plenty of its furniture and also homewares online,” Mr Daghlian said.
“It has had a rough ride on the market over the past six months but has bounced back quite strongly.”
The Aussie dollar was buying 71.61 US cents, 52.81 British pence and 62.67 Euro cents in afternoon trade.
