Evening Wrap: ASX extends gains, BHP reaffirms guidance, Whitehaven reverses selloff

The S&P/ASX 200 closed 21 points higher, up 0.3%.

The local sharemarket is on a two day winning streak led by utilities and industrials, Whitehaven Coal reverses a massive selloff to close higher, BHP reaffirms its FY23 production and cost guidance, Westpac's lending index paints a bearish view for growth in 2023 and why China's GDP data is delayed.

Let's dive in.

Markets

The ASX 200 shrugged off the negative news about Apple cutting its iPhone 14 production and negative SPI futures. A few more thoughts in the Post Market Brief below.

• 9 out of 11 sectors higher

• Defensives including Utilities, Discretionary and Healthcare led to the upside

• Discretionary stocks also outperformed thanks to gains from Aristocrat, The Lottery Corp, IDP Education and Domino's

• Energy fell an outsized -0.74% as oil prices stage a two day losing streak

• Tech, Real Estate and Materials also underperformed benchmarks

• 61% of the top 200 advanced

Announcements

• Syrah (ASX: SYR) +6.8% shares were halted in afternoon trade, pending a funding and commercial arrangement announcement

• Pendal (ASX: PDL) +5.5% experienced a -5.9% decline in funds under management during the September quarter 

• Whitehaven (ASX: WHC) +1.8% generated $1.55bn cash in the September quarter thanks to a record average coal price of $581/t. Coal production fell -37% QoQ due to wet weather and flood related road closures 

• Medibank (ASX: MPL) +0.1% shares were halted pending an announcement regarding the cyber incident 

• Calix (ASX: CXL) unch plans to raise $60m at $4.55 per share, an 11.1% discount to its last closing price. Proceeds will be used to fast track the company’s decarbonisation solutions spanning across several industrial industries

• Beach Energy (ASX: BPT) -0.3% posted an -8% decline in quarterly production due to natural field declines, flooding and unplanned outages

• Northern Star (ASX: NST) -0.5% sold 369koz of gold at an AISC of A$1,788/oz in the September quarter, down -4.4% and up 12.2% respectively compared to a year ago

• BHP (ASX: BHP) -0.9% reaffirmed its FY23 production and cost guidance

• Origin (ASX: ORG) -1.4% guided to $500-650m EBITDA for its Energy Markets segment in FY23-24 from $365m in FY22. Improvement to be driven by ‘expected increase in natural gas gross profit’

• Megaport (ASX: MP1) -22.1% posted 10% QoQ revenue growth in the September quarter to $33.7m  

Broker updates 

• Nib (ASX: NHF) Morgans upgrades to Add from Hold. TP $8.27

• Brambles (ASX: BXB) Citi retains Buy. TP $13.59 from $14.16

• Megaport (ASX: MP1) Citi retains Buy. TP $14 from $13.90

• Rio Tinto (ASX: RIO) Citi retains Buy. TP $115

• St Barbara (ASX: SBM) Macquarie retains Outperform. TP $0.57

• Westpac (ASX: WBC) Morgan Stanley retains Overweight. TP$24.40

Economy

• Westpac lending index was unchanged month-on-month in September

  • “... the six-month annualised growth rate in the index, which indicates the likely pace of economic activity relative to the trend three to nine months into the future, fell to -1.15% in September from -0.33% in August, the weakest since the pandemic first hit in 2020,” the Westpac report said

  • “The Leading Index continues to point to a material loss in momentum to a below-trend growth pace heading into 2023, broadly in line with Westpac’s forecast that economic growth will slow from 3.4% in 2022 to 1.0% in 2023.”

Commodities 

• Iron ore futures on the Dalian Commodity Exchange rose 0.3%

• Natural gas rose 1.5% after falling -11.8% in the previous three sessions

• Uranium futures hit a one-month high of US$51.1/lb

Quick bites 

• China's GDP data delay: China should have released trade data last week and Q3 GDP growth on Tuesday, but it didn't. Bloomberg said the delay was because top officials who needed to sign off on the figures were attending the Communist Party congress. That's slowed the approval process for the release of the reports. "The bigger issue is the lack of transparency - this is an unprecedented delay, but there was no announcement of why, prompting speculation and confusion." said Bloomberg report James Mayger.

Latest news

Post market brief

Wednesday was a rather encouraging day following a slightly weak lead from Wall Street - where major indices faded from session highs.

The ASX didn't really seem to care about reports about Apple cutting its iPhone 14 production. Instead, we saw Discretionary sector lead to the upside, closing 0.8% higher.

Still, volatility remains unprecedented and in the midst of US earnings seasons, the market can easily run either way following a better/worse than expected result from a big name.

We're also seeing bond yields (both Australian and US) edge a little higher after a two day losing streak. Higher bond yields has typically weighed on upside for equity markets, at least in the past few months.

Index

S&P/ASX 200: A close above the 50-day moving average, a step in the right direction and improving its damaged trend

XJO chart (Source: TradingView)

I promise they'll be more charts and insights tomorrow.

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