Chemist Warehouse drives share market to new record high

The Aussie market finished at a new high on Thursday, helped by the listing of the mega Chemist Warehouse–Sigma Healthcare merged business.

Australia’s sharemarket closed at another record on Thursday off the back of a mega deal in the pharmaceutical space and strong earnings releases during reporting season.

The benchmark ASX200 index closed up marginally by 4.7 points or 0.06 per cent on Thursday to 8540, although the market pared back most of its days earnings on the bell.

The broader All Ordinaries also rose by 4.60 points or 0.05 per cent to close at 8804.20.

Shares in the freshly combined Sigma Healthcare and Chemist Warehouse jumped 5.43 per cent to $2.91 on its debut on Thursday, as the reverse takeover created a new $32bn entity. Under the terms of the deal Chemist Warehouse shareholders hold 85.75 per cent of the ASX-listed merged entity, while Sigma shareholders hold 14.25 per cent.

Sigma Healthcare shares soared on the Chemist Warehouse reverse takeover. Picture: NewsWire / Max Mason-Hubers

On Thursday the local market hit another record high, despite only three of the 11 sectors finishing in the green. Material was the strongest performer up 1.52 per cent, while consumer discretionary rose 0.88 per cent.

Capital.com senior financial market analyst Kyle Rodda said the Aussie market climbed to another record high, powered by a surprisingly strong US lead after the Wall Street ignored higher than expected inflation data.

“Material stocks rose to lead the market higher. Interest rate sensitive areas of the market, like utilities, were weighed down by higher yields, which rose after last night’s inflation data, with that sector also pushed lower by AGL’s half year results,” Mr Rodda said.

Mr Rodda said the Aussie dollar was trading around US62.79c, despite fears of the US dollar strengthening.

“The AUD/USD remains a fraction below the 0.63, as it also shrugged off the impact of falling odds of further rate cuts in the US,” he said.

Overall just three of the 11 sectors finished in the green. Picture Newswire/ Gaye Gerard.

“The markets have an eye towards US producer price data and retail sales figures in the coming days before attention turns to next week’s RBA decision, at which the markets imply an 85 per cent chance of a rate cut.”

Once again mixed news came out of reporting season on Thursday. Furniture and homewares group Temple and Webster skyrocketed on its results which showed net profit after tax is up 118 per cent to $9m. Shares jumped 13.03 per cent to close at $16.14.

On the other hand IAG shares dived 12.56 per cent to $7.80, despite reporting a 91.2 per cent increase in net profits after tax to $778m.

Investors were however spooked by the company’s forward guidance where it said it gross written premiums would be up by mid to high single-digits

Treasury Wine Estates’ share price fell 5.74 per cent to $10.51 after the company announced it couldn’t make a deal for its low-cost brands Wolf Blass, Lindeman’s, Yellowglen and Blossom Hill.

It was a good day for some of Australia’s largest companies with iron ore miners jumping on the back of futures hitting a four-month high of $US108.05 a tonne.

BHP jumped 2.12 per cent to $40.99 to lead the three major miners while Rio Tinto grew 1.13 per cent to $120.35 and Fortescue finished in the green up 1.76 per cent to $19.66.

CBA continued to trade at a new record high up 0.45 per cent to $166.72. NAB also firmed up 0.32 per cent to $41.24 while, ANZ and Westpac traded mostly flat.