Markets at a glance 21 August

Around the grounds

The Australian share market has snapped an eight-session winning streak dogged by heavyweight miners and financials, as investors eye minutes of the FOMC’s latest meeting for clues on the path of policy.

Energy stocks have slumped 2% as the price of oil slips on estimates showing swelling in US crude inventories and some signs tensions in the Middle East are easing. As mentioned, miners are lower, down some 0.6%, while the financials index has slid 1%, set to snap nine sessions of consecutive gains.

Technology stocks are bucking the broader trend, with the index up over 5% to touch a record high fuelled by a rally in tech major WiseTech Global.

In the commodity complex, iron ore prices are stable with Dalian finding a floor after reports China may allow local governments to buy unsold homes in Beijing’s latest bid to prop up the property sector. The price of gold continues to hover at record highs above $2,500 an ounce.

The Australian dollar is holding just below a one-month high, while the kiwi unit has edged a touch higher.

In the news

Let’s get to the companies reporting in today’s trade. Kicking things off, shares of oil and gas explorer Santos (ASX: STO) have sunk to a two-month low after it posted an 18% drop in first half profit, hurt by weaker prices and a decline in production and sales volume thanks to poor demand from top consumer China.

Underlying profit for the period came in at AU$654 million, down from the AU$801 million last year, and below consensus estimates of AU$694.5 million. Shareholders will get an interim dividend of 13 cents per share, higher on the 8.7 cent payout a year earlier.

Domino’s Pizza (ASX: DMP) shares are sharply lower, on a soft start to FY25 dragged by sales in Japan which so far are negative in 1H25. This despite an over 136% surge in fiscal 2024 profit from ordinary activities, on a near 3% rise in revenue. Final dividend of 50.4 AU cents a share declared.

The stock is down over 43% YTD, as of last close.  

Corporate Travel Management (ASX: CTD) shares have plunged to touch a four-year low as the company forecasts revenue decline of 18% and a near 50% decline in EBITDA margins across Europe in fiscal 2025. FY24 profit however logged a 22% increase.

The stock is down over 36% this year as of last close.

On the flipside, shares of Australian listed WiseTech Global (ASX: WTC) have soared to touch an all-time high after the software solutions provider posted a 15% jump in full year underlying NPAT and lifted its dividend 10% to 9.2 Australian cents a share.

The stock is up over 25% YTD, as of last close.

Australian listed shares of property investment company Charter Hall Group (ASX: CHC) are soaring in today’s trade after the company’s FY operating EPS came broadly in line with estimates but sees FY25 EPS of about 79 cents per share, 5% ahead of consensus. The stock is up 0.5% YTD, as of last close.  

And shares of Brambles (ASX: BXB) are singing a similar tune, touching a record high after the logistics firm reported a 17% pop in underlying profit for the year ended 30 June and unveiled a AU$500 million on-market share buy-back in fiscal 2025. Shareholders are set to receive a final dividend of 19 US cents per share, with the future dividend payout ratio range lifted to 50-70%.  

BXB shares are up over 15% this year as of last close.

Finally, across the ditch, New Zealand listed shares of Fletcher Building (ASX:FBU) are under pressure as the company reports a near 60% slide in full year underlying net profit, missing estimates, as weak construction activity dampened volumes across its key markets. The company has swung to a statutory net loss of NZ$227 million, and no dividend was declared for FY24.  

Going global

Around the region, Asian equities are losing steam, with Tokyo’s share market edging lower on the back of a stronger yen overnight and market participants await preliminary benchmark revisions to U.S. employment data for the 12 months through March alongside the Jackson Hole Symposium which will get underway tomorrow.

Looking ahead a recent Reuters poll shows the Nikkei 225 is expected to extend its recovery after the worst sell-off in 37 years, before pushing to an all-time high by the end of next year.

Forecasts are for the index to rise 7% to 40,000 by year-end before rallying to 42,000 by end of June and then to a fresh record of 42,500 by the end of 2025. Japan’s benchmark closed at 37,388 on Monday.

MSCI’s broadest index of Asia-Pacific shares outside of Japan is also lower, while Hong Kong’s Hang Seng index has slumped nearly 1.5% as JD.com shares slide on reports from Bloomberg top shareholder Walmart (NASDAQ: WMT) is looking to raise as much as US$3.75 billion by selling its stake in the Chinese e-commerce firm, ending eight-year partnership.

Rounding things out in forex. The US dollar has touched its lowest level this year against the euro as traders assume the brace position ahead of potentially crucial revisions to U.S. payrolls data and of course that speech by FOMC Chair Powell at Jackson Hole on Friday.

Against the yen, the big dollar has fallen below the closely watched 145 level amid pressure from U.S. bond yields, which hit their lowest since August 5. More broadly, the euro has pushed to a December 2023 high, sterling is also firmer sitting at levels last seen in July of last year.

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