The Australian sharemarket edged higher on news of a potentially positive development in eastern Europe and as the mid-point in the local profit reporting season was marked with a torrent of results.
The benchmark S&P/ASX200 index firmed 11.9 points or 0.16 per cent to 7233.6, while the All Ordinaries Index lifted just 4.2 points to 7507.
Ord Minnett said US stocks fell on Friday after escalating tensions in Ukraine and US warnings of a potential Russian invasion prompted investors to dump risky assets in the run-up to a long weekend, with the tech-heavy Nasdaq copping the brunt of the selling.
OMG chief executive Ivan Tchourilov said the ASX opened lower, following the US market down, but sentiment turned just before midday after it was announced the Russian and US presidents would meet to discuss stability in Europe.
“Gold and energy stocks pared early gains, which were bought up as a hedge against tensions spilling over,” Mr Tchourilov said.
“Meanwhile, high-risk stocks rebounded after being sold off early in the session.
“We had a number of half yearly results released today, pulling the market every which way.
“A2 Milk dragged the consumer staples sector higher, with their lowest earnings still above market expectation.
“Investors are also bullish on the outlook provided, which predicts higher growth and earnings for 2H22.”
A2 leapt 11.13 per cent to $5.89, making it the best performing stock in the top 200.
AGL was in second place, surging 10.62 per cent to $7.92 after Atlassian co-founder and co-chief executive Mike Cannon-Brookes lobbed a $7.50 takeover bid through a Brookfield-led consortium.
It’s reportedly a bid to speed up shutting down AGL’s coal-fired power stations – and was swiftly rejected.
“The proposal does not offer an adequate premium for a change of control,” AGL Energy chairman Peter Botten said.
“ … AGL Energy shareholders would be forgoing the opportunity to realise potential future value via AGL Energy’s proposed demerger as both proposed organisations pursue decisive action on decarbonisation.”
Woolworths booze spin-off Endeavour Group rallied 10.29 per cent to $7.18 after booking a 15.6 per cent rise in first half net profit as retail sales from chains including Dan Murphy’s countered the hit of lockdowns to its hotels business, which includes pokies.
BCF and Rebel owner Super Retail Group reported a near 36 per cent first half net profit plunge, as higher costs ate into its margins, sending its shares tumbling 9.49 per cent to $11.63.
Homewares retailer Adairs slid 6.11 per cent to $2.92 after its first half results and trimmed interim dividend disappointed the market.
Telstra and rival TPG announced a 10-year network sharing deal that will boost the latter’s 4G coverage from around 96 per cent to 98.8 per cent of the population – just eclipsing Optus, Australia’s second largest telco.
In return, Telstra gets access to TPG’s spectrum across 4G and 5G, allowing it to grow its network and pocket an estimated $1.6-$1.8bn in additional revenue over the initial decade of the deal.
Telstra shares added 1.54 per cent to $3.97, while TPG rose 3.11 per cent to $5.97.
But it was New Zealand telco Chorus that led the communications index higher, jumping 9.94 per cent to $6.86 after announcing a more than 50 per cent increase in net profit, a guidance increase, a higher dividend and a $150m share buyback.2
“Could you be any more bullish?” Mr Tchourilov asked.
“The same couldn’t be said for Tyro Payments, who couldn’t be any more below market expectations – if today’s half-yearly is anything to go by.
“Tyro, whose bread and butter come from rental fees and transactions through their EFTPOS machines, were hard hit by Covid.
“Throw in rising interest rates against its high growth business model and it’s been a trying time for shareholders.
“Underlying performance appears to be going well, with Tyro seeing increases across the customer base, transaction numbers and payments profitability.
“Tyro was also paying off rent relief for struggling merchants, growth initiatives and higher wage costs, which took a bite out of the bottom line.”
Tyro shares plunged 25.9 per cent to $1.61.
Buy-now-pay-later provider Zip fell 7.78 per cent to $2.37 after providing a trading update ahead of its half-year report on Thursday, flagging a larger than expected cash loss and saying it was still in takeover talks with Sezzle, which dropped 3.78 per cent to $1.78.
Fuel retailer Ampol retreated 3.14 per cent to $30.27 despite delivering a full-year result that RBC Capital Markets analyst Gordon Ramsay described as solid and in line with his company’s forecast, with an improving outlook.
Moody’s Investors Service vice president Ian Chitterer went a step further, labelling the results as strong, given the pandemic-related disruptions to Ampol’s business.
ANZ inched two cents higher to $28.17, Commonwealth Bank rose 0.35 per cent to $98.09, National Australia Bank gained 0.56 per cent to $30.75 and Westpac put on 1.36 per cent to $23.85.
Rio Tinto added 0.8 per cent to $120.20, BHP improved 0.58 per cent to $48.24 and Fortescue slipped 1.2 per cent to $19.61.
The Aussie dollar was fetching 72.16 US cents, 52.95 British pence and 63.47 Euro cents in afternoon trade.
