Shares opened lower in response to falls on Wall Street overnight where the Dow lost 1% after the President’s day long weekend. The ASX 200 was down 15 points or 0.25% early in the session, but is recovering to lift into positive territory at lunch where the index is 2 points higher at the time of writing.
Miners have been the main drag on the market with heavyweights BHP and Fortescue both losing ground on underwhelming earnings results. BHP is down 4.75% after announcing a 37% drop in first half profit to US$2.02 billion, underlying profit did lift 25% but still missed analyst forecasts. BHP recorded US$21.78 billion in revenue and will pay a US$0.55 interim dividend. Fortescue is down 3.8% on weaker first half revenue of US$3.7 billion, down 18% and a 44% drop in net profit. Rio Tinto (RIO) and gold miner Newcrest Mining are both also 1.8% lower.
Offsetting the losses among the mining space are the consumer staples with the likes of Wesfarmers (WES) and the a2Milk company (A2M) both substantially higher on well received earnings results. A2M shares are rocketing 24% after the infant formula maker has lifted revenue by 70% while earnings more than doubled to NZ$143 million and net profit soared 150% to NZ$98.5 million. Fellow infant formula maker, Bellamy’s (BAL) is also up 11% so far. Wesfarmers is 4% higher despite an 87% drop in its half year net profit to $212 million as it continues to be hampered by poor sales in Bunnings UK & Ireland and Target stores in Australia. Bunnings Australia and Officeworks were the star performers with double digit earnings growth.
There has been a plethora of company announcing profit reports with discount store, The Reject Shop (TRS) jumping 10% on a positive result. Other stocks to rise include Lendlease (LLC), up 6.3% while Seven Group (SVW) is 15% on its half year release. On the flip side, WiseTech Global (WTC) has slumped 20% despite the logistics company lifting first half profit by 8% and announcing it is on track to achieve FY18 guidance. WTC wasn’t alone with Santos (STO) and Sydney Airport (SYD) both weaker by 2.4% and 1.3% respectively after releasing FY17 results.
In economic news, wages grew for the second consecutive quarter with the December reading coming in with 0.6% growth and 2.1% growth year on year, which was higher than market expectations. The Aussie dollar initially jumped after the economic release but has since fallen back to US78.73 cents. So far 1.4B units have traded worth $2.6B with 482 stocks higher, 550 lower and 356 unchanged.
Published by CommSec