Market recovers yesterday’s losses

The Australian sharemarket is clawing back some of yesterday’s losses, helped by a rally in the Energy sector and gains in the Financial, Materials and Healthcare sectors. The ASX 200 (XJO) is up 62 points or 0.9% to 6,840.

Oil stocks are climbing higher thanks to a 2.5% jump in global oil prices overnight to fresh 13-month highs. The rise was fuelled by a big drop in US crude production last week because of the Texas snow storm. The 1.1 million barrels per day plunge was equal to the largest ever weekly fall on record. Woodside Petroleum (WPL) is up 3.2% to $25.56, while Oil Search (OSH) has jumped 3.1% to $4.37.

In earnings news, a raft of companies have released results today including Qantas (QAN), The A2 Milk Co (A2M), Stockland (SGP), TPG Telecom (TPG), Ramsay Health Care (RHC), Afterpay (APT), Zip Co (Z1P) and Flight Centre (FLT).

Qantas (QAN) reported a first half loss of $1.03b as it grappled with a drop in international travel, Victoria’s extended COVID-19 lockdown and nationwide border closures. Revenue fell 75% over the period to $2.3b and the airline has pushed back expectations of when local travel will recover. While it’s forecasting domestic capacity to hit 60% of pre-COVID levels by Q3 and 80% by Q4, it’s not expecting regular international travel to resume until October. QAN shares are up 3.9% to $5.20.

A2M shares have tumbled 15.3% to $8.85 after the company lowered its full year earnings guidance for a third time since September. The firm reported a 35% fall in first half net profit to $120m, while sales over the period declined by 16%. COVID restrictions have impacted A2M’s China e-commerce sales.

Afterpay shares have been halted as the company raises up to $1.5b to increase its stake in Afterpay US from 80% to 93%. The buy-now-pay-later provider reported a half year net loss of $76.5m, up 77% on a year earlier. Revenue surged 89% to $417.2m as the value of transactions processed climbed to $9.8b from $4.8b.

In economic news, CAPEX rose by 3% in the fourth quarter beating consensus forecasts for a rise of 0.5%.The Aussie dollar is still hovering around three year highs against the greenback, fetching 79.67 US cents.

Published by CommSec