ASX takes rollercoaster ride after jam-packed earnings season news, including AMP jilted

The ASX closed barely changed after a jam-packed day of earnings season news, with investors applauding Telstra and Newcrest, but AMP plunged.

The Australian sharemarket seesawed throughout the trading day before closing barely changed, with miners and telcos among the winners, while supermarkets lost ground and AMP plunged after a takeover deal tanked.

The S&P/ASX200 eased 6.8 points to 6850.1 while the All Ordinaries Index dipped 11.7 points to 7122.1.

ThinkMarkets Australia analyst Carl Capolingua said it was a “pretty dour” session outside of the gold sector and the telcos.

“It’s interesting because risk appetite globally has been on the rise over the last few sessions,” Mr Capolingua said.

“We’ve seen strong increases iron ore and other base metals prices, crude oil, the Australian dollar, and high-growth equity indices like the Nasdaq. But the local bourse hasn’t really responded. We’re just treading water.

“So, that leaves one feeling that we haven’t reached our ‘all-in moment’ yet.

“Investors clearly think they’ve got plenty of time to get set … We’re waiting for the next catalyst to swing sentiment. I’m not sure what that’s going to be.”

Telstra posted a half-year net profit dip to $1.1bn, saying headwinds from the NBN rollout and a $170m hit from the COVID-19 pandemic dented earnings, which would have been broadly flat otherwise.

Telstra announced major changes to its store network. Picture: NCA NewsWire/Bianca De Marchi

The telco also announced major changes to its store network by cutting ties with independent licensees to bring all of its retail branding in-house.

Mr Capolingua said Telstra’s 2.52 per cent share price rise to $3.25 was probably more to do with chief executive Andy Penn’s bullish comments on future growth and progress on the TowerCo spin-off, which he described as “well-advanced”.

“Some of the buying today would have been positioning ahead of an announcement on that down the track,” the analyst said. “No doubt, maintaining the dividend also helped.”

Moody’s Investors Service vice-president Ian Chitterer said the results supported Telstra’s credit rating and outlook as the company reduced debt to compensate for the EBITDA gap created by the NBN Co rollout.

Crown Resorts lifted 2.45 per cent to $10.05 after Credit Suisse said it assumed the company would once again be found suitable to hold its Sydney casino licence but expected the opening would be delayed until December.

At least one broker thinks Crown Sydney will open this year. Picture: NCA NewsWire/Penny Stephens

Wealth management company AMP plunged 11.04 per cent to $1.37 after announcing in its full-year results that New York Stock Exchange-listed global asset manager Ares Management Corporation would not proceed with a full takeover offer but the parties were still engaging on a possible sale of AMP Capital.

AMP reported an underlying net profit slump to $295 million, down from $439 million previously, reflecting “the impacts of COVID-19 on our clients, our business and the broader economy and financial markets”.

Shopping centre and airports owner Unibail-Rodamco-Westfield dropped 3.93 per cent to $4.65 after reporting it only had 70 days of normal operations in 2020 due to COVID-19 closures but sales were strong when retailers were open.

“There is clear pent-up consumer demand for high quality shopping destinations, and leading and emerging brands are choosing URW locations ahead of a market rebound,” chief executive Jean-Marie Tritant said.

Consumer staples were weaker, with Coles dropping 1.09 per cent to $18.09 and Woolworths slipping 0.92 per cent to $41.15.

Consumer staples stocks pulled back. Picture: Sam Ruttyn

Australia’s biggest gold miner Newcrest jumped 4.05 per cent to $26.22 after booking a 134 per cent half year statutory profit surge to $US553 million ($A714.8 million) and record free cash flow thanks to strong prices for the precious metal.

Mr Capolingua said the underlying profit result was towards the top end of expectations, but the market responded mainly to a new dividend policy.

“Management is confident enough in the stability of future free cash flows to increase the payout ratio from 10-30 per cent to 30-60 per cent,” he said.

“We’ve been talking about the gold majors as transitioning into ‘cash cows’ for a while now. This move demonstrates it’s started to happen.”

Rio Tinto firmed 1.1 per cent to $118.72 and BHP gained 0.93 per cent to $45.48.

ANZ inched 0.2 per cent higher to $24.89, Commonwealth Bank advanced 1.08 per cent to $87.05, National Australia Bank put on 0.28 per cent to $25.05 and Westpac rose 0.27 per cent to $22.29.

The Aussie dollar was fetching 77.41 US cents, 55.86 British pence and 63.79 Euro cents in afternoon trade.

Originally published as ASX takes rollercoaster ride after jam-packed earnings season news, including AMP jilted