ASX 200 rises; Woodside in the red; Lynas falls on weak quarter; Qube MLP dispute ongoing; Arafura Nolans funding 'milestone'

Tech sector leads ASX turnaround. Woodside reveals subdued quarter, upped Scarborough cost. Lynas suffers low output, falling prices. Warehouse NZ confirms Adamantem bid.

Local producer updates and corporate developments at home and overseas are keeping investors busy. Picture: Nikki Short

Welcome to the Trading Day blog for Tuesday, July 23. The ASX 200 index closed 0.5 per cent higher, to 7971.10 points on broad gains led by tech and healthcare stocks.

The Aussie dollar is trading around US66.26c at 5pm AEST.

Updates

4:53 pm July 23, 2024

ASX 200 ends up 0.5pc; most sectors rise

David Rogers

Australia's share market ends a three-day fall as most sectors rise after US gains, but intraday gains are trimmed by falls in commodity prices and US stock futures.

The ASX 200 closes up 0.5 per cent at 7971.1 after hitting a two-day high of 7993.3.

Nine of 11 sectors rise with tech, health care, consumer discretionary, financials and communications outperforming. In those groups Wisetech adds 2.2 per cent, CSL rises 1 per cent, Wesfarmers rises 1.9 per cent to a record high and JB Hi-Fi jumps 2.6 per cent to a record high, and CAR Group jumps 2.1 per cent.

The index comes off its high as S&P 500 futures fall 0.3 per cent and commodities tumble. Singapore iron ore futures fall 2.4 per cent to a near four-month low of $US101, WTI crude futures down 1.7 per cent to $US78.39 a barrel, and Comex copper futures down 1 per cent to $US4.1525 a pound.

Woodside falls 3.7 per cent after its production report disappoints and oil retreats, and BHP, Rio Tinto and Fortescue fall 0.4-1.4 per cent with Fortescue weakest.

Alphabet and Tesla are due to report after the US close.

4:29 pm July 23, 2024

Super Retail gains after court suppression attempt

Eli Greenblat

Joseph Carbone

Super Retail Group shares rise 4 per cent-plus after revelations the retailer had taken presumptive action to suppress material which could potentially be commercially confidential, sensitive or inflammatory in a possible court case over the bullying and sex scandal which has plagued the retailer since April.

The $3.3bn company, which operates chains Supercheap Auto, rebel, BCF and Macpac, had previously complained of a "shakedown" at the hands of lawyers from Harmers, acting for employees who accused the company of a litany of wrongdoings, including an affair between chief executive officer Anthony Heraghty and former HR head Jane Kelly.

The preemptive move hasn't scared off investors, however, with SUL shares closing 4.6 per cent higher to $15.39.

3:48 pm July 23, 2024

Mesoblast shares surge on FDA win

Cameron England

Mesoblast shares surge to a 52-week high Tuesday after the US Food and Drug Administration accepted the company’s resubmission of its biologics license application (BLA) for its Ryoncil compound for use in children.

The company suffered a setback in the approval process for the drug last year, when the FDA said it wanted more data to support marketing approval for the compound, which treats steroid-refractory acute graft versus host disease (SR-aGVHD).

However, Mesoblast managed to turn the setback around with chief executive Professor Silviu Itescu telling The Australian earlier this year after the company ran through the data with the FDA in person it was able to win over the regulatory body.

In a statement, Mesoblast said: "Mesoblast’s resubmission on July 8, 2024 addressed remaining CMC (Chemistry, Manufacturing, and Control) items after being informed by FDA at the end of March 2024 that, following additional consideration, the available clinical data from the Phase 3 study … appears sufficient to support submission of the proposed BLA for remestemcel-L for treatment of pediatric patients with SRaGVHD".

Dr Itescu said: "We are pleased that FDA has accepted our BLA resubmission for review, and look forward to the potential approval of Ryoncil for children with SR-aGVHD".

Mesoblast shares traded as high as $1.33 per share — a 12 month high — before settling to be trading at $1.30 per share in afternoon trade, up more than 12 per cent.

3:28 pm July 23, 2024

Nuix soars on good day for tech

Joseph Carbone

Shares in billion-dollar software firm Nuix soar more than 9 per cent in afternoon trading on no apparent news, as the tech sector outperforms the rest Tuesday.

Nuix was trading at 79 per cent above its 20-day average, at approximately 1.45 million shares after lunch.

Tuesday's jump erases the 5.1 per cent fall on Monday and adds to Nuix's fantastic year, having seen its share price rise 211 per cent over the past 12 months.

The tech sector has risen 1.5 per cent Tuesday, with heavy-hitters WiseTech (1.7 per cent), Xero (1.5 per cent) and NextDC (1.1 per cent) leading the charge.

NXL shares last traded at $3.43 per share, up 9.2 per cent.

12:53 pm July 23, 2024 Highlight

Scarborough to cost Woodside extra $750m-plus

Colin Packham

Woodside Energy has revealed a $US500m ($753m) cost hike at its Scarborough LNG project in WA, with analysts predicting further budget pressure as the producer works to bring on first gas by 2026.

The cost of developing Scarborough has lifted to $US12.5bn from the previous $US12bn estimate, a 4 per cent increase, with Woodside’s share now at $US8.2bn.

The WA producer blamed "scope maturation" of the Pluto Train 1 project that will take gas from the offshore field and process it for export.

The market should brace for a further $US500m cost hit, Citi analyst James Byrne said.

WDS shares are trading 3.4 per cent lower Tuesday, to $27.64 per share.

12:48 pm July 23, 2024

Crown names new executives

Glen Norris

Crown Resorts has appointed a raft of new executives as it moves to become less "casino-centric" amid tighter regulation of gaming operations.

The Melbourne-based group announced on Tuesday former Crown Perth chief executive David Tsai had been promoted to president and group chief operating officer while Stanford Le would replace Mark McWhinnie as CEO of Crown Sydney. Brian Pereira, currently CFO of Crown Perth, will become interim CEO.

In other appointments, former ExxonMobil executive Gemma Allman will lead the group’s government affairs team, Nicole Pelchen will join as chief technology officer and Louise Tebbutt commences as chief people and culture officer.

Crown Resorts chief executive Ciarán Carruthers said the appointments came at an important time of transformation for the business.

"I would like to thank Mark McWhinnie for his significant efforts leading our extensive reform and remediation program in Sydney over the past three years, which culminated in the regulator finding Crown suitable to operate in NSW," said Mr Carruthers. "Mark’s leadership has been instrumental in evolving our business and we look forward to continuing that focus under Stanford as the new Crown Sydney CEO."

12:27 pm July 23, 2024

Cracks emerging in inflation expectations: Deutsche

David Rogers

Cracks are emerging in the RBA's narrative that inflation expectations "remain consistent with the inflation target", according to Deutsche Bank.

"Headline inflation has been above the RBA's 2-3 per cent target range every quarter since Q2-2021 and on the RBA's forecasts, it is expected to remain there until Q4-2025: four and half years in total," says Deutsche chief economist, Phil Odonaghoe.

"Against that backdrop, cracks in inflation expectations are starting to emerge."

Trust in the RBA's inflation target has "never been this low for this long".

The Melbourne Institute's monthly household inflation expectations survey shows that the proportion of respondents that expect inflation to be in the 2-3 per cent target range has only been lower than current levels during periods of acute price shocks, and never for as long as in the current episode.

And the Deutsche Bank Inflation Expectations Index shows that after a trend decline since Q1-2023, inflation expectations rose slightly in Q2.

Odonaghoe says that if that continues over the second half of the year, the RBA's willingness to tolerate above-target inflation outcomes until the end of 2025 could prove costly.

"As it navigates the 'narrow path' back to target, the Bank has repeatedly made clear it is alert to the risk that inflation expectations could decouple from the inflation target," he says. "These early warnings from inflation expectations only add to the case for tighter policy."

Deutsche Bank is one of about six financial markets forecasters that expect the RBA will lift the cash rate by 25bps at its upcoming meeting in August based on stronger-than-expected inflation outcomes in H1-2024.

12:14 pm July 23, 2024

More money, less red tape for farmers: ABARES

Joseph Carbone

A report published by ABARES through the Department of Agriculture, Fisheries and Forestry on the slowdown in Australian broadacre productivity says climate variability is to blame and more investment in R&D, as well as less red tape, is necessary to help agriculture in a changing climate.

The report found broadacre productivity growth has slowed to an annual growth rate of 0.7 per cent from 2000 to 2023, down from the 2.2 per cent rate achieved through the 1980s and 90s.

ABARES executive director Dr Jared Greenville said: "We have seen that changes in Australia’s climate have dragged down productivity growth, and when we experience severe drought productivity growth significantly drops away.

"Other factors are also at play, including rising input costs, fluctuating commodity prices, fewer new transformative technological developments, slowing economic dynamism, and limited opportunities for productivity enhancing policy intervention.

"When we remove the effect of climate variability, we still observe productivity growth as farmers continue to adopt existing technologies and practices and from the investments made in our R&D system. Continued investment in R&D and practices to help agriculture thrive in a changing climate, along with uptake of new technologies by farms will be key."

​"Productivity also thrives in free and open markets, so government should ensure that farms are able to consolidate or change without unnecessary barriers."

12:11 pm July 23, 2024

ASX 200 up 0.8pc in broad rebound

David Rogers

Australia's share market continues to hit fresh two-day highs at noon in a broad rebound that's set to end a three-day losing streak after a similar move in the US.

The S&P/ASX 200 index is up 0.8 per cent at 7990.8 points on light volume.

The chart is very positive after the index "confirmed" support at 7900 this week.

All sectors except energy are in the green, with the tech, health care, industrials and consumer discretionary sectors outperforming.

WiseTech jumps 2.6 per cent, CSL adds 1.2 per cent, Transurban gains 1.3 per cent and Wesfarmers rises 1.1 per cent. Brambles jumps 3.2 per cent.

Major banks rose 0.7-1.2 per cent led by Westpac. Iron ore miners are mixed.

US futures fall a touch but the mood is positive after US political uncertainty eased a notch and Mag 7 rebounds but doesn't undermine other sectors.

Quarterly reports from Alphabet and Tesla are due after the US close.

12:00 pm July 23, 2024

'Enormous need' among PolyNovo's revenue boosters

Valerina Changarathil

"Enormous need" for its burns treatment product in conflict zones and developing countries supported by WHO, charities and governments is among the main reasons PolyNovo's FY24 revenue is likely to jump 57.5 per cent to $104.8m.

The unaudited number, which includes BARDA, compares to its $66.5m result in FY23. FY24 sales of $92m are up 54.5 per cent on the same time last year with US market up 49 per cent. Rest of the World sales are up 73 per cent to $23.3m.

Audited results are due on August 23.

Chairman David Williams attributed the performance also to organic growth and the strength of the UKI market from a slow start in non-burns. Shares in PolyNovo are higher near $2.43 close to noon AEST.