Market Wraps

Evening Wrap: ASX 200 higher as energy stocks surge, AMP reverses early selloff

Thu 10 Aug 23, 4:56pm (AEST)

The S&P/ASX 200 closed 19 points higher, up 0.26%. 

The Index climbs to a 1-week high, European gas prices jump the most since March 2020 amid Australian supply worries, the S&P/ASX 200 Energy Index rallies to a three-and-a-half year high, AMP reverses a 6.4% selloff to close 4.6% higher and Boral's upbeat earnings lifts building and construction peers including CSR and Adbri.

Let's dive in.


Today in Review

Thu 10 Aug 23, 4:44pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,357.4 +0.26%
All Ords 7,568.5 +0.33%
Small Ords 2,854.8 +0.68%
All Tech 2,560.7 -0.93%
Emerging Companies 2,078.2 +1.13%
Currency
AUD/USD 0.6549 +0.32%
US Futures
S&P 500 $4,505.25 +0.43%
Dow Jones $35,345.0 +0.41%
Nasdaq $15,253.75 +0.50%
Name Value % Chg
Sector
Energy 12,102.4 +2.27%
Consumer Discretionary 3,093.9 +0.60%
Health Care 39,504.6 +0.50%
Real Estate 3,084.7 +0.41%
Materials 18,135.2 +0.30%
Industrials 6,901.8 +0.10%
Communication Services 1,593.8 +0.09%
Financials 6,463.3 +0.03%
Consumer Staples 13,110.3 -0.32%
Utilities 8,800.2 -0.41%
Information Technology 1,896.7 -1.79%

Enjoying the Evening Wrap? Sign up to get it sent directly to your inbox after every trading day.

ASX 200 Session Chart

2023-08-10 16 36 45-Window
ASX 200 rallies intraday to finish at best levels (Source: Market Index)

Markets

The ASX 200 finished higher and at best levels. The move was supported by solid earnings from names like Boral, AMP and QBE Insurance. As well as a broad-based rally for all things Energy (such as coal, uranium, oil and gas) amid potential strikes from Chevron and Woodside workers in Australia. The S&P/ASX 200 Energy Index rallied to levels not seen since January 2020. We have US inflation data due tonight at 10:30 pm, where consensus expects headline inflation to reaccelerate from 3.0% in June to 3.3% in July. While core inflation is expected to remain unchanged at 4.8%. The Index is beginning to poke its head up to a 1-week high but let's see what CPI will bring for tomorrow.

Economy

No major economic announcements.


Latest news


Market Insights

Reporting season is starting to ramp up. We'll recap a few interesting takeaways from today's results.

AMP (ASX: AMP) sold off as much as 6.4% in the first ten minutes of trade but closed 4.6% higher.

  • Why the selloff: AMP CEO Alexis George said "Given the current uncertainty around the Court’s judgment and other litigation matters, we are taking a prudent approach with our capital and liquidity and will pause tranche three of the capital return."

  • How big was the beat: Underlying 1H23 net profit was $112m compared to Citi expectations of $97m. Revenue of $668m was comfortably above consensus expectations of $657m

The capital return delay might've hit a soft spot. But then the market realises, 'hey the results weren't that bad', resulting in a V-shaped move to breakeven between 10:10 am and 10:35 am.

2023-08-10 16 12 26-Window
AMP intraday chart (Source: Market Index)

Boral (ASX: BLD) posted an all-round beat with an upbeat guidance. Key figures (vs. expectations) include:

  • Revenue of $3.46bn, up 17% (vs. $3.3bn)

  • EBIT of $231.5m, up 106% (vs. $209m)

  • Net profit of $142.7m, up 304% (vs. $125m)

  • FY24 EBIT guidance of $270-300m (vs. $279m)

The stock opened 4.8% higher and rallied to an 8.5% close on volumes (4.99m) not seen since 8 February 2023, which was the day of its half-year result where the stock rallied 12.8%.

The upbeat result inspired peers including:


Interesting news and movers

Trading higher

  • +27.3% Lake Resources (LKE) – Bounce after -23% in last three

  • +12.1% Cettire (CTT) – Earnings

  • +8.5% Boral (BLD) – Earnings

  • +7.9% Galileo Mining (GAL) – Drilling results

  • +6.3% AUB Group (AUB) – Guidance

  • +4.6% AMP (AMP) – Earnings

  • +3.3% Alliance Aviation Services (AQZ) – Earnings

  • +2.7% MMA Offshore (MRM) – New finance facility 

  • Energy sector move: Strike Energy (+6.0%), Beach Energy (+3.6%), Santos (+2.6%), Woodside (+1.9%)

  • Coal sector move: New Hope (+5.8%), Stanmore (+5.1%), Yancoal (+4.8%), Whitehaven (+4.3%)

  • Uranium sector move: Elevate (+14.1%), Alligator Energy (+11.8%), Bannerman Energy (+10.4%), Deep Yellow (+9.1%), Boss Energy (+8.0%), 92Energy (+7.1%), Paladin Energy (+5.9%)

Trading lower

  • -6.4% Downer (DOW) – Earnings

  • -3.1% AGL (AGL) – Earnings

  • -2.7% IDP Education (IEL) – Downgraded by Macquarie

  • -2.5% A2 Milk (A2M) – Downgraded by CSLA 

  • -1.2% QBE Insurance (QBE) – Earnings


Broker notes

A few Macquarie notes of interest:

Commbank (CBA) – Underperform with $88.00 target ($104.85 at 9 Aug close)

  • “CBA delivered a solid FY23 result underpinned by strong balance sheet trends and slightly higher revenue, offset by higher costs.”

  • “However, with limited scope to grow earnings, its ~19x FY24E PE mutliple is difficult to justify (~45-60% premium to peers).”

IDP Education (IDP) – Underperform with $21.00 target ($24.28 at 9 Aug close)

  • “We expect a soft FY23 result from IDP. We think consensus is overestimating multi-destination student placement volumes (i.e. EBITDA margins).”

  • “With an expensive multiple (44x FY23 P/E), in addition to expected consensus downgrades to margins and IELTS volumes, we downgrade IDP to Underperform.”

Suncorp (SUN) – Outperform with $17.20 target ($13.54 at 9 Aug close) 

  • “SUN reduced its FY23 ordinary dividend to account for the delay in the bank sale process. Questions now surround quantum of 1H24.”

  • “Bank NIMs and CTIs are forecast to deteriorate in FY24; however, with the bank sale still pending we suspect this won't be a focus.”

  • “Stronger FY24 GWP growth expectations were a bright spot albeit offsetting weakness in the underlying margin guidance of 10-12% mid- point.”

Wesfarmers (WES) – Neutral with $52.00 target ($49.87 at 9 Aug close)

  • “Metcash Hardware indicates that DIY hardware demand is softening relative to trade. This may be a headwind for Bunnings in the half.”

  • “The outlook for discretionary consumer spending over the next six months looks challenging. However, the cash generation of Mt Holland significantly changes the cashflow of the group. WES is a defensive consumer stock with significant earnings & dividend upside over the medium term.”


Scans 

Top Gainers

Code Company Last % Chg
BCB Bowen Coking Coal... $0.118 +26.34%
SHE Stonehorse Energy... $0.02 +25.00%
LKE Lake Resources N.L. $0.205 +24.24%
UBI Universal Biosens... $0.31 +24.00%
TEM Tempest Minerals Ltd $0.016 +23.08%
View all top gainers

Top Fallers

Code Company Last % Chg
SP3 Spectur Ltd $0.022 -24.14%
CLA Celsius Resources... $0.012 -20.00%
ERW Errawarra Resourc... $0.13 -18.75%
PEC Perpetual Resourc... $0.026 -18.75%
MRZ Mont Royal Resour... $0.175 -18.61%
View all top fallers

52 Week Highs

Code Company Last % Chg
TNC True North Copper... $0.27 +22.73%
MPR Mpower Group Ltd $0.023 +15.00%
WC8 Wildcat Resources... $0.218 +14.47%
MGU Magnum Mining and... $0.059 +11.32%
BLD Boral Ltd $4.74 +8.47%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
BCA Black Canyon Ltd $0.135 -15.63%
FRX Flexiroam Ltd $0.027 -15.63%
ASE Astute Metals NL $0.042 -10.64%
8VI 8VI Holdings Ltd $0.13 -10.35%
HPC The Hydration Pha... $0.036 -10.00%
View all 52 week lows

Near Highs

Code Company Last % Chg
AN3PI Australia and New... $103.87 -0.70%
PCI Perpetual Credit ... $1.02 -1.45%
AW1 American West Met... $0.335 -5.63%
WVOL Ishares Edge MSCI... $36.76 +0.60%
WBCPI Westpac Banking C... $102.86 -0.23%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
RAC Race Oncology Ltd $1.035 -5.05%
MAF Ma Financial Grou... $4.31 -0.23%
HPI Hotel Property In... $2.93 +1.38%
GNX GENEX Power Ltd $0.14 +3.70%
NHF Nib Holdings Ltd $7.90 -0.25%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

Get the latest news and insights direct to your inbox

Subscribe free

Get free post-market insights with our Evening Wrap

Create an account to receive our concise, data-driven post-market recap, sent directly to your inbox, every day.

Along with the Evening Wrap, you'll join 100k+ investors who receive our Morning Wrap and Weekend Newsletter.