AU Morning Wrap: ASX Retreats, Domino's Plunges, Origin Powers Up

US stocks slumped as a rebound in business activity sharpened fears that the top of the current interest rate cycle is still some way off. Bond yields climbed to their highest since November.

Private-sector business activity surged to an eight-month high this month, according to S&P Global. The agency's flash US Composite Output Index rose to 50.2 from a January reading of 46.8.

Consumer discretionary and tech stocks lead losses with Domino's Pizza the biggest laggard, down 20 per cent after the company sliced dividends. Lovisa fell 4.4 per cent even as it reported a promising start this year following a strong first half.

Woolworths stock rallied 1.8 per cent after it lifted earnings.

Santos rose 2.5 per cent after following a 221 per cent jump in annual net profits.

All the major banks and mining giants recoiled.

Network sales growth was 4.2 per cent, but same store sales declined by 2.2 per cent due to "most-recent tumultuous trading conditions". New store openings are still "expected to be strong" in financial year 2023, but may be below 8 per cent to 10 per cent, "depending on franchisee sentiment".

Domino's declared an interim dividend of 67.4¢ a share, partially franked.

The group said operating income (EBITDA) swung to a loss of $8.2 million, versus $14.2 million in the prior corresponding half.

The underlying profit was lower than the prior comparative period due to a drop in contributions from the company's Leonora and Atlantic operations driven by lower production which was exacerbated by cost inflation. This was partly offset by both a higher contribution from Simberi and the average gold price.

Net profit on a statutory basis bell to $845 million from $7.06 billion in the year-earlier period.

The board declared an interim dividend of 6.6¢, up 39 per cent on 1H22, representing a payout ratio of 20 per cent.

Total revenue gained 35 per cent to $378.2 million while EBITDA rose 36 per cent to $187.3 million.

Total revenue tripled to $1 billion in the six months ended December 31, compared with the year-earlier period.

Low-cost jewellery retailer Lovisa has reported a promising start to trade in first seven weeks of this year after a strong first half.

The company reported comparable store sales growth of 12.3 per cent in the first seven weeks compared with the year-earlier period. Sales for the period rose 24 per cent.

Statutory net profit fell to $301 million from the year-earlier $888 million.

Santos declared an unfranked dividend of US15.1¢ per share, a 78 per cent increase.

Dividends paid: None

• Iron ore rallied above US$130 a tonne after BHP said it saw evidence of "green shoots" in the Chinese economy. CEO Mike Henry said Chinese and Indian growth would help offset any weakness in western economies over the next 12 months. He cited Chinese data on new loans, house prices and business sentiment.

The most-traded May ore on China's Dalian Commodity Exchange rallied 3.4 per cent in daytime trade to 919 yuan (US$133.80) a tonne.

• A "risk-off" session saw oil reverse almost all of Monday's US$1.08 rally. Brent crude settled US$1.02 or 1.2 per cent weaker at US$83.05 a barrel.

Oil shed 4 per cent last week amid speculation the strength of the US economy would encourage the Fed to raise benchmark rates so high that a recession becomes inevitable.

• Gold retreated as the US dollar and treasury yields rose. Higher yields increase the opportunity cost of holding metals, which do not pay a coupon.

Gold for April delivery settled US$7.70 or 0.4 per cent lower at US$1,842.50 an ounce. The NYSE Arca Gold Bugs Index shed 1.22 per cent.