The Match Out: Resources lead the ASX higher ahead of US Inflation data

Equities regained their mojo today after two softer sessions either side of the weekend, the ASX200 popping back above the 7000 an a broad-based rally with more than 80% of the index finishing higher though strong contributions from the resources sectors was key. Energy in particular was strong following OPEC releasing forecasts for oil demand to increase by 2.5mbboe a day helping to stem the weakness in a sector that has been under pressure.

• The ASX 200 finished up +57pts/ +0.83% to 7006
• The Energy sector was best on ground (+2.54%) while Materials (+1.46%), Tech (+1.42%), Real Estate (+1.27%) and Industrials (+1.12%) also did well.
• Utilities (-1.11%) and Telcos (-0.79%) were the only sectors fell today.
• A mixed bag for local data printing this morning Consumer Confidence continuing to fall, as are Business Confidence but Business Conditions was up last month.
• Universal downgrades for ANZ today, most pulling back to a neutral rating after yesterday’s result – of note UBS were bulls on the stock but now pulled back PT to $25.00, losing conviction.
• The result was softer than expected in terms of profit, and clearly it was a bit messy, lower margins are the main reason for the associated cut to earnings but they have grown their book above system while they could – now more sanity prevailing. We continue to hold ANZ in our Growth Portfolio, but remain underweight the banks collectively.
• Worley (ASX: WOR) +3.85% had a good session and has been incredibly resilient in recent months. We continue to see WOR as a major beneficiary of the energy transition.
• NAB (ASX: NAB) -3.22% traded ex-dividend today for 84cps fully franked, worth $1.20 grossed for franking – the stock fell 93c
• CBA (ASX: CBA) +0.96% 1Q update was slightly better than expected, CBA faring the best of the Big 4 with Cash NPAT of $2.5b.
• ALS Ltd (ASX: ALQ) +8.52% 1H numbers for the analytical testing came in slightly ahead of expectations, though the market was positioned fairly bearishly heading into the result. Guidance for FY24 UNPAT of $310-325m was in line with consensus.
• Telstra (ASX: TLS) -2.03% Investor Day today, the telco announcing plans to install more fibre routes, particularly across the Pilbara region. The telco maintained FY24 guidance but did note a small bump in demand had been seen following the Optus outage last week.
• Catapult (ASX: CAT) +15.05% sports-tech business had positive FCF in the 1H with strong revenue growth and falling costs supporting earnings. 
• Iron Ore was marginally higher in Asia.
• Gold was flat at $US1,945/oz.
• Asian stocks were mixed today, Nikkei faring the best +0.55%, China flat and the Hang Seng is marginally lower.
• US Futures are mostly flat expect for Nasdaq futures are up +0.15%.
• Tonight the focus will be on US Inflation numbers. The market is expecting +0.3% MoM for the Core, and +0.1% MoM for the Headline rate.

ASX 200 Index - intraday 

ASX 200 Index - daily 

Commonwealth Bank (CBA) $102.28

CBA +0.96%: 1Q numbers out for the biggest of the Big 4, CBA shows it remains the quality pick of the banks with a strong start to FY24. Cash NPAT of $2.5b was around a 3% beat to consensus expectations championed by what looks like better-than-expected Net Interest Margins (NIM) despite some upward pressure on deposit pricing. Costs were up 3%, in line with expectations, while credit quality remains strong with a bad debt charge of just $198m or 9bps. Capital remains in a strong position with CET1 of 11.8% despite the 2H23 dividend impact of 86bps.

• CBA posted the best numbers of peers this period, on track to beat expectations at the HY result early next year.

Broker Moves

• Elders Cut to Hold at Moelis & Company; PT A$7.92
• MMA Offshore Rated New Buy at Moelis & Company; PT A$1.65
• Elders Raised to Neutral at Citi; PT A$7.30
• Deep Yellow Rated New Speculative Buy at Canaccord; PT A$1.44
• ANZ Group Cut to Neutral at UBS; PT A$25
• ANZ Group Cut to Neutral at JPMorgan; PT A$25.40
• ANZ Group Cut to Neutral at Citi; PT A$26
• FleetPartners Group Ltd Raised to Overweight at Morgan Stanley
• Ramsay Health Cut to Reduce at CLSA; PT A$56.50
• Elders Cut to Accumulate at CLSA; PT A$7.95

Major Movers Today

Enjoy the night
The Market Matters Team