ASX breaks losing streak as Qantas, Medibank, Coles shares climb

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket finished higher on Thursday as bumper results from Qantas Airways, supermarket giant Coles and health insurer Medibank buoyed investor sentiment.

The S&P/ASX200 closed up 27.5 points, or 0.3 per cent, at 8268.2 points, with eight of its 11 industry sectors advancing, led by consumer staples and industrials. The Australian dollar traded at US62.9¢ at 4.30pm AEDT.

Investors got a reprieve from recent losses on Thursday.Credit: Peter Rae

The lifters

Qantas rose 5.6 per cent after the national carrier declared its first dividend since the pandemic. The 26.4¢ a share payout comes after the airline delivered $1.4 billion in underlying profits in the December half, a jump of 11 per cent, amid strong travel demand.

Medibank soared 10 per cent after the health insurer hiked its interim dividend by 8.3 per cent while private hospital operator Ramsay Health Care jumped 6.8 per cent after it announced it has appointed Goldman Sachs to advise on the possible sale of its controlling stake in European business Ramsay Sante.

Supermarket giant Coles climbed 5.6 per cent. The grocery giant’s first-half profits beat expectations as value-for-money promotions during the Christmas, Halloween and Black Friday seasons lifted earnings, and it also benefited from the troubles of rival Woolworths, where a protracted worker strike left supermarket shelves bare. Woolies shares edged up 0.3 per cent.

Miners advanced. BHP, the sharemarket’s second-largest company, rose by 0.8 per cent. Fellow iron ore miners Fortescue (up 1.7 per cent) and Rio Tinto (up 1.5 per cent) also finished higher, while gold miners Newmont (up 1.9 per cent) and Northern Star Resources (up 1.9 per cent) also shone.

The laggards

Despite those strong performers, gains on the local bourse were limited due to a lacklustre session for the banking heavyweights, which account for a large part of the market. The Commonwealth Bank, the biggest stock on the ASX, closed largely flat, while National Australia Bank shed 0.2 per cent. Westpac edged up 0.4 per cent and ANZ added 0.5 per cent.

Embattled tech group WiseTech lost another 2.6 per cent, pulling the information technology sector into the red (down by 1.2 per cent). The company unveiled its half-year results on Wednesday and announced that disgraced founder Richard White has been appointed executive chairman.

Healthcare stocks and real estate investment trusts also struggled, with biotech giant CSL down 1.7 per cent and Westfield shopping centre owner Scentre down 2 per cent.

The lowdown

Thursday’s string of robust company results managed to interrupt the losing streak for the local bourse, which had fallen for seven out of the eight previous sessions as investors lapped up bumper profits and dividends from blue-chip companies such as Qantas and Coles.

It was a welcome reprieve from February declines, which Tony Sycamore, market analyst at IG Australia, said were likely to wipe out most of the market’s 4.6 per cent gain recorded in January.

“The decline this month is largely down to earnings disappointment within the ASX200 financial sector, which has dropped 4.8 per cent this month, along with the health care sector,” he said. “As is often the way during turbulent times, the defensive consumer staples and utilities have provided a buffer”.

However, he noted that “after an intense two weeks of earnings, reporting season has entered the home straight with reports due [on Friday] from companies including Life360, Star Entertainment, TPG and Harvey Norman”.

Local investors are also taking cues from Wall Street, where the stock market has been struggling following some weaker-than-expected reports on the world’s largest economy, including a couple that showed US households are getting more pessimistic about inflation and tariffs pushed by President Donald Trump. Some of the harshest drops hit big tech and other high-growth stocks, whose incredible momentum had seemed unstoppable.

Overnight in the US, the S&P 500 ended flat, the Dow Jones Industrial Average dropped 0.4 per cent and the tech-heavy Nasdaq rose 0.3 per cent.

Much of the US market’s attention remained on Nvidia, the chip company that’s become the poster child of the AI rush. It rose 3.7 per cent ahead of its latest profit report, which arrived after trading ended for the day, but the shares fell back 1.5 per cent in after-hours trading.

Nvidia gave a bullish revenue forecast for the current quarter, reassuring investors that spending on artificial intelligence computing remained strong. Sales will be about $US43 billion ($68.2 billion) in the fiscal first quarter, which runs through April, the company said. Analysts had estimated $US42.3 billion on average, with some projections ranging as high as $US48 billion.

The muted response to Nvidia’s much-anticipated earnings meant the Australian market also “enjoyed a calmer session,” Sycamore said.

Tweet of the day

Quote of the day

“Given that he’s already slapped 25 per cent tariffs on imports of aluminium and steel, it seems almost inevitable that there will be US tariffs on copper, with speculation ranging from a rate of 10 per cent to the 25 per cent imposed on the other metals. Copper is arguably the most strategic of metals, given how central it is to most 21st century technologies.”

That’s Stephen Bartholomeusz commenting on Donald Trump’s tariff executive order. You can read more of that column here.

With AP

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