Australian sharemarket gains ground, with iron ore miners offsetting bank weakness

The ASX has a ‘good chance’ of achieving its biggest feat in 78 years if it performs well again tomorrow.

The Australian sharemarket recovered from a shaky start to close in the green, driven by gains among iron ore miners including Fortescue Metals, which delivered a bumper full-year result set to fatten the already bulging wallet of billionaire chairman Andrew “Twiggy” Forrest with a whopping dividend payment.

The S&P/ASX200 closed 0.22 per cent higher at 7504.5 while the All Ordinaries Index put on 0.37 per cent to 7788.6.

“The annual profit reporting season is mostly done … there’s a good chance that this tremendous winning streak that we find ourselves on could remain intact and could extend to an 11th consecutive month,” CommSec analyst Steve Daghlian said.

“That would be the first time in 78 years that we’ve accomplished that type of feat.”

OMG chief executive Ivan Tchourilov said the session began swimmingly but swiftly went downhill then clawed back to “land in the clouds”.

“The ASX was rocketing to the moon at open this morning, but quickly came crashing back down to earth,” he said.

Fortescue jumped 6.6 per cent to $21.32 after booking a huge $US10.3bn ($A14.2bn) net profit, up 117 per cent, thanks to record shipments during a strong run in iron ore prices, which reached all-time heights in May but have since fallen back.

Ker-ching: Andrew Forrest is set to pocket more billions thanks to the record Fortescue dividend. Picture: Justin Benson-Cooper / The West Australian

Fortescue declared a final dividend of $A2.11 per share, bringing the full-year payout to shareholders to A$3.58 per share, equating to A$11bn.

That’s more paydirt for Mr Forrest, who is the miner’s biggest investor.

“Fortescue was trading up more than six per cent for the day, which will most likely continue until it reaches the ex-dividend date,” Mr Tchourilov said.

“It’s here that many investors will question Fortescue’s viability in the long term, without a giant pile of cash sitting right in front of them.

“A dark cloud hangs above iron ore and its demand in China, which accounts for about 75 per cent of the market and is directly responsible for Fortescue’s bumper year.”

Iron ore prices lifted more than 4 per cent overnight and Rio Tinto advanced 3.12 per cent to $113.12, while BHP gained 2.53 per cent to $45.83.

Oil prices firmed by about 2 per cent, sending Santos 2.35 per cent higher to $6.11 while its takeover target Oil Search added 1.08 per cent to $3.75.

Funeral homes operator Invocare leapt 8.68 per cent to $12.15 after returning to profitability and declaring an interim dividend of 9.5 cents per share.

Invocare returned to profitability in the six months to June 30.

“What has been helpful for Invocare was fewer lockdowns for the six months to June – that meant larger gatherings and that impacted its bottom line,” Mr Daghlian said.

“It did warn, though, that looking forward, the most recent Covid restrictions and lockdowns we’ve got across the country will certainly weigh on the second half and it declined to provide guidance for that reason.”

Embattled casino operator Crown Resorts reported a $261.6m full-year loss, down from a $79.5m net profit for the previous financial year, which was in itself an 80.2 per cent slump.

Costs for mandatory closures due to lockdowns were an eye-watering $120.6m net, but its Perth venue was only hit by short shutterings and traded above expectations as Western Australia enjoyed relatively Covid-free status.

Crown also revealed it was no longer in talks with private equity firm Oaktree Capital Management about buying out major shareholder James Packer, who holds a 37 per cent stake, and had commenced a review of its Crown Aspinalls business in the ritzy London area Mayfair.

Shares in Crown eased 0.11 per cent to $9.31.

Crown’s Perth operations were a glimmer of positivity amidst the gloom enshrouding the casino giant. Picture: Tony McDonough

Tech company Altium suffered a hiding after presenting unaudited results showing full-year guidance had been met, with the audited numbers expected next week.

“The unaudited results, however, weren’t particularly bad; they told a story of record profit and a record dividend, which is a nice story to tell after knocking back a takeover bid earlier in the year,” Mr Tchourilov said.

Shares in Altium plunged 14.25 per cent to $29.85.

Another tech stock, Nuix, which has been hitting headlines for all the wrong reasons, had “a rollercoaster of a day after announcing its results”, Mr Tchourilov said.

The company’s statutory net loss for 2020-21 was $1.6m, a big reversal from a $23.6m net profit previously, but on a pro forma basis – excluding unusual or one-off transactions – it achieved a net profit of $25m, up 33.2 per cent.

Nuix shares were up about 10 per cent in morning trade, peaking at $3.13, but closed 10.8 per cent lower at $2.56.

“The company has been under heavy scrutiny since ASIC announced an investigation into its IPO, and investors took favourable pricing in the morning session to bail out while the going was good,” Mr Tchourilov said.

Two online-only retailers, Temple & Webster and Adore Beauty, both booked record results. Picture: Supplied via NCA NewsWire

“From there it was a landslide, and with a third of Nuix’s shares coming out of escrow next Monday, they could be heading towards even more pain.”

Online furniture and homewares retailer Temple & Webster soared 10.56 per cent to $14.34 after reporting record full-year revenue, profit and customer numbers.

Chief executive Mark Coulter said the new financial year had started strongly, with sales up 49 per cent on last year.

“While we don’t take for granted how fortunate we are to be able to trade through lockdowns, we believe Covid has accelerated the shift from offline to online that was already in progress,” he said.

Another online-only retailer, Adore Beauty, also booked record full-year revenue, profit and customer numbers, and its shares rose 3.33 per cent to $4.97.

ANZ slid 1.13 per cent to $28, Commonwealth Bank gave up 1.1 per cent to $100.42, National Australia Bank backtracked 0.36 per cent to $27.54 and Westpac shed 0.73 per cent to $25.80.

The Aussie dollar was fetching 72.93 US cents, 52.94 British pence and 61.77 Euro cents in afternoon trade.

Originally published as Australian sharemarket gains ground, with iron ore miners offsetting bank weakness