SYDNEY, AAP – Supermarkets and gold stocks proved the safe choices on the Australian market as a flagging dollar added interest to Reserve Bank commentary on Tuesday.
A seven per cent gain for supermarket supplier Metcash helped shares in consumer staples climb almost two per cent on an otherwise stagnant ASX.
Metcash lifted first-half profit after more people shopped locally during COVID-19 lockdowns.
Gold miners also flourished. Northern Star and Evolution each gained a little more than three per cent.
Deep Data Analytics chief executive Mathan Somasundaram said both supermarkets and gold benefited from inflationary expectations.
“If you’re a supermarket, you can pass on rising costs. People don’t have a choice. They want to eat,” Mr Somasundaram said.
Gold is often used as a hedge against inflation and so miners of the yellow metal prospered.
US Federal Reserve officials’ talk of earlier rate hikes is leading investors to buy the greenback and at the same time devaluing other currencies.
The Australian dollar slipped below 70 US cents briefly on Monday.
This will exacerbate the cost of importing some goods.
The Reserve Bank will likely comment on the decline of the dollar when it makes its monetary policy decision on Tuesday. No change to the record low rate of 0.1 per cent is expected.
The Aussie dollar had improved in the later hours of trade.
The benchmark S&P/ASX200 index closed up 3.9 points, or 0.05 per cent, to 7245.1 points.
The All Ordinaries closed lower by 14.6 points, or 0.19 per cent, to 7529 points.
ASX technology shares were most troubled and lost a little more than two per cent.
Afterpay shares fell as the company adjourned a shareholder meeting which was to consider payments giant Square purchasing it.
The shareholder meeting was postponed to December 14 while the company waits for the Bank of Spain to approve the proposal.
Shares were down 4.32 per cent to $94.00.
Boral is selling its North American fly ash business for about $1 billion.
The company wants to focus on building materials in Australia and has found a buyer in Eco Material Technologies.
Shares were up 1.62 per cent to $6.27.
The big miners struggled. BHP shed 1.59 per cent to $39.59. Fortescue rose 0.29 per cent to $17.15. Rio Tinto was down 1.78 per cent to $93.82.
In banking, there was little movement. The Commonwealth fared best of the majors and gained 0.65 per cent to $97.24.
Sigma Healthcare substantially lowered its full-year earnings forecast.
In September, growth of five per cent was expected. The company has since changed this to a drop of 10 per cent.
A troubled rollout of SAP software has affected customers and sales.
Shares were down 7.62 per cent to 48 cents.
Shares in industrial product distributor Vulcan Steel rose after the company upgraded its earnings forecast.
The New Zealand business has had strong sales since lockdowns ended and increased full-year earnings and profit guidance by about 25 per cent.
Shares rose almost five per cent to $8.50.
The Australian dollar was buying 70.17 US cents at 1726 AEDT, lower from 70.76 US cents at Friday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed up 3.9 points, or 0.05 per cent, to 7245.1 points on Monday.
* The All Ordinaries closed lower by 14.6 points, or 0.19 per cent, to 7529 points.
* At 1726 AEDT, the SPI200 futures index was down 22 points, or 0.3 per cent, at 7263 points.
One Australian dollar buys:
* 70.17 US cents, from 70.76 cents on Friday
* 79.31 Japanese yen, from 80.18 yen
* 62.18 Euro cents, from 62.69 cents
* 53.03 British pence, from 53.27 pence
* 103.91 NZ cents, from 104.19 cents.