9 August Markets at a glance
Around the grounds
The Australian share market is expected to end the week in positive territory, after stronger-than-expected U.S. jobs data overnight moved to quell investor fears over a possible recession.
Energy stocks are leading the gains, up over 1% as the price of oil settled higher. Gold stocks have climbed 2.6% as the price of safe-haven bullion jumped overnight. The miners have also joined the rally and financials have added around 0.5%.
And the tech sector is in focus, tracking gains on Wall Street to rise nearly 4%, marking their biggest intraday percentage jump since February, with the sub-index on track for its third consecutive session of gains, if the current trend holds.
The AXIJ is up over 18% this year, as of last close.
In the news
Australian listed shares of News Corp (NWS) have surged as the company flagged the potential sale of its Australian cable TV and streaming unit Foxtel after receiving an approach for the business. This as the company’s fourth quarter revenue topped the street, thanks to strength in its Dow Jones unit and gains in its Australian real estate business. Speaking of, REA Group (REA), which operates residential and commercial property websites in Australia, posted a 37% spike in revenue from a year earlier, boosted by price increases and a rise in national listings. Its shares are up to touch a six-month high on the back of those results.
Elsewhere – QBE insurance (QBE) shares are under pressure as half year profit misses analysts forecasts despite more than doubling in the period. Meantime, the insurance company says it’s entered reserve transactions with RiverStone International and Enstar in a bid to de-risk the firms’ exposure to reserves totalling AU$1.6 billion.
Australian listed shares of Nick Scali (NCK) have taken a dive as the furniture retailer says full year profit slid over 20% with trading expected to deteriorate further in the first half of fiscal 2025 for its UK business amid disruption increases due to store refurbishments and change in the product range.
The stock is up just over 20% this year, as of last close.
Quick check in on what’s on the corporate calendar next week, Magellan Financial (MFG), Arena REIT (ARF), Steadfast Group (SDF), Telstra Group (TLS), Origin Energy (ORG), Domain holdings (DHG) and Cochlear (COH) all hand down numbers.
Turning to broker moves, Morningstar has raised its fair value estimate for AMP (AMP) to AU$1.25 from AU$1.20 a share citing stronger flows in the company’s platforms and trusts business. Looking ahead, the broker says signs of earnings recovery are now clearer and it feels AMP can reach a maintainable earnings base of around AU#287 million per year until 2028.
The stock is up 37.6% this year, as of last close.
Going global
It’s been a wild week for global markets, with shares around the region expected to end on a high. Japan’s Nikkei 225 has all but recovered the 13% crash on Monday, set to end the week down just 1.5%. MSCI’s broadest index of Asia-Pacific shares outside of Japan have also climbed, down 0.3% for the week.
Positive data out of China is also helping to bolster sentiment, after consumer inflation came ran at 0.5% in July, above forecasts signalling there is less risk the economy could slide into deflation.
In FX, the US dollar has continued to gain momentum after a strong jobless claims print, and is now up for a fourth straight day against the Japanese yen. The euro is little changed on a week ago, while sterling remains steady after a 0.5% rally overnight that brought it back from the brink of an over one-month low and the Australian unit has eased slightly, but is up 1.2% this week.
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