Wall Street hit by AI jitters, ASX set to rise
staff reporter
Updated ,first published
The Australian share market rose at the open as investors digested a raft of company results and National Australia Bank jumped following a trading update.
The S&P/ASX 200 rose 45.5 points, or 0.5 per cent, to 9004.4 in early trade, with 10 of 11 industrial sectors in positive territory. The ingredients are all that’s left.
National Australia Bank made $2 billion in profit in the December quarter; Because the big four banks expanded in mortgage and commercial lending, they also benefited from a decline in borrowers having difficulty repaying.
NAB, the last of the big four banks to provide investors with information about its performance this month, said in a statement on Wednesday that its unaudited cash profit rose 16 percent to $2 billion in the three months to December compared to the same period a year ago. NAB shares rose 5.7 per cent in early trade, while Westpac added 1.8 per cent and ANZ Group added 0.7 per cent, but Commonwealth Bank lost 0.5 per cent.
Suncorp’s profits have fallen and the insurer cut its dividend in the December half after disaster costs hit its profitability hard.
The insurance group behind AAMI, GIO and other major brands reported a net profit of $263 million, down more than 70 percent from the same half last year, after catastrophe costs exceeded its allowance and led to weaker investment returns. It cut the interim dividend to 17 cents per share from 41 cents last year.
Chief executive Steve Johnston said that in half of the major natural disaster cases, the company received 71,000 insurance claims, resulting in net costs of about $1.3 billion. Suncorp shares were 1.6 percent higher in early trading.
Billionaire Kerry Stokes’ holding company and its US bidding partner raised their bid for BlueScope steel, raising its “best and last” bid to $32.35 per share from $28.35 previously. Bidders SGH and Steel Dynamics said the all-cash offer valued BlueScope at $15 billion.
BlueScope said in an ASX announcement on Wednesday it would consider the latest offer after rejecting an earlier offer. BlueScope shares rose 1.6 percent in early trading, while SGH gained 0.9 percent.
Mining giants BHP fell 1.7 percent, Rio Tinto fell 0.2 percent and Fortescue fell 0.2 percent. Gold miners pulled back, with Northern Star falling 2.2 percent and Evolution Mining falling 3.5 percent. Silver major South32 lost 0.9 percent.
Energy giant Santos lost 1.1 percent as it reported a 35 percent drop in full-year profits and announced layoffs. The oil and gas company is targeting a 10 percent reduction in headcount after profits fell due to falling oil and gas prices.
Woodside Energy and Yancoal were 0.5 percent lower in early trading.
Technology shares rose, led by Technology One rising 9.5 percent after it raised its profit forecast. WiseTech increased by 0.3 percent and Xero increased by 1.3 percent.
Australia’s real estate investment trusts report increasing confidence in the property sector. Mall giant Vicinity Centers will pay investors an interim distribution of 6.2 cents per share compared to the same period last year and will pay out 88.4 percent of its adjusted funds from operations.
It was stated that private and mini-large sales increased by 5.1 percent in the first half due to increased demand for retail space and contraction in supply. Nearby shares fell 0.6 percent.
Office and industrial heavyweight Dexus rose 5.6 percent after announcing it had nearly doubled its total office floor rental volume.
“Valuations have turned positive, transaction and fundraising markets are recovering and our confidence in the long-term fundamentals of the business has strengthened,” Chief Executive Ross Du Vernet said.
Apartment developer Mirvac Group reported an operating profit of $248 million, or 6.3 cents per share, for the half-year ended Dec. 31, or 5 percent growth on the previous year, up 3.6 percent.
The Australian dollar was trading at 70.84¢ at 10.41am AEDT.
A quiet close overnight for the US stock market masked major swings below the surface, as companies talked about how disheartened their customers were and some tech stocks continued to feel the headwinds of the AI boom.
The S&P 500 index rose 0.1 percent after previously alternating between a gain of 0.5 percent and a loss of about 1 percent. The Dow Jones gained 32 points, or 0.1 percent, while the Nasdaq composite gained 0.1 percent.
On Wall Street, Paramount Skydance led the market and Warner Bros. It rose 4.9 percent after Discovery said it would give Paramount a chance to make a “best and last” offer to buy the entertainment company. Paramount is trying to outbid Netflix.
Warner Bros. Discovery increased by 2.7 percent and Netflix increased by 0.2 percent.
Declines in some Big Tech stocks, including Alphabet’s 1.2 percent decline, were the heaviest weight on the market Tuesday.
But the moves were temporary, and Nvidia vacillated between being one of the market’s heavyweights and one of its biggest strengths.
Markets need these types of Big Tech companies to stabilize, and “investors need to see less of a sell first/ask questions later behavior,” according to Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute.
with AP
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