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Local shares posted solid gains in opening trade on Wednesday as the ASX 200 recovered a portion of Tuesday’s losses which marked the worst 1 day loss since September 2015. The ASX 200 started the session with a gain of 25 points before trading to a gain of 105 points shortly thereafter as the index recovered from the four-month lows that were traversed yesterday. At lunch locally, every sector with the exception of Utilities had advanced. The gains were led by Materials, Energy and Industrials. Participation was above average with 2.5 billion transactions being measured by the ASX valued at $3.4 billion. At lunch 1089 shares were higher, 205 were lower and 228 were unchanged
The improved local sentiment stemmed from a sharp turnaround for US share markets overnight, which rebounded after posting the biggest one-day declines in the S&P500 and Dow Jones indices in more than 6 years on Monday. Notwithstanding the rebound, the US session saw volatile trade. At its extremes the Dow was down by 567 points and higher by over 600 points in intra-day trading. The technology (+2.8%) and consumer discretionary (+2.5%) sectors led the US recovery. At the close of trade, the Dow Jones was up by 567 points or 2.3%. The S&P 500 index rose by 1.7%. And the Nasdaq was up by 148 points or 2.1%.
Financials were higher with the exception of the CBA, which was flat at lunch after the lender reported a lower that forecast first half (1H) cash profit. Net profit for the period edged higher to $4.91 billion in the six months to December compared to $4.9 billion the year before. The group made a $375 million provision in anticipation of fines that could emerge from breaches of Anti-Money Laundering and Counter-Terrorism Financing regulations. Additionally a $200 million expense provision was made for expected costs relating to known regulatory, compliance and remediation program costs, including the Financial Services Royal Commission. These provisions were included in both reported statutory and cash net profit after tax. The impact of the provision saw cash profit fall 1.9% to $4.74 billion. The bank announced an interim dividend of $2.00 per share.
In other news, Premier Investments (PMV) shares were 0.7% lower at $13.95. The retailer continues to agitate against the board of MYER (MYR) – requesting the share register of the department store operator as it seeks to convene an extraordinary general meeting (EGM) in an effort call a vote on replacing the MYR board. MYR shares were 0.4% lower at 65 cents.
Carsales.com (CAR) reported an adjusted 1H NPAT of $60.9 million, an increase of 11% accompanied by a 12% increase in revenue to $200.1 million. The group highlighted a strong performance in the domestic private business, with revenue up by 20% – driven by growth in private advertising products. Additionally there was solid growth in the domestic dealer business, with improved momentum in Q2 driven both by the release of new product enhancements and improving consumer sentiment. CAR shares were 3.3% lower at $13.88, the group declared a 1H dividend of $0.205 a 10% increase on the pcp, with a record date of Friday March 23, 2018 and a payment date of Thursday April 19, 2018
Nick Scali (NCK) shares were 2% or 14 cents lower at $6.84 after reporting a 15% lift in net profit after tax in the first half 2018, driven by improving sales & store expansion. Profit growth was driven by 8.1% increase in revenue to $128.0m for the half-year. The increased revenue resulted from a 2.6% growth in same store sales and new store openings for Nick Scali Furniture stores (excluding Sofas2Go). NCK declared a fully franked interim dividend of 16.0 cents, with a record date of 7 March 2018 to be paid on 28 March 2018
Major currencies were mixed against the US dollar in European and US trade compared with the Asian session yesterday. The Aussie dollar rose from lows of US78.34 cents to highs near US78.94 cents in late US trade. In early regional trade the local unit had eased to US78.88 cents.
Originally published by Tom Piotrowski – Market Analyst (Author), CommSec