AU Morning Wrap: ASX Drops, Incitec Dives on Disappointing Profit
G'day, mooers! Check out the latest news on today's stock market!
• US stocks slip, growth shares shrug off index losses
• Incitec biggest laggard on disappointing profit
• Stocks to watch: Incitec Pivot, Best & Less, United Malt
- Moomoo News AU
Wall Street Summary
Major stocks indexes fell on Tuesday despite support from growth stocks. Shares of companies in most industries traded lower with debt-ceiling negotiations remaining at a standstill.
The $S&P 500 Index (.SPX.US)$ slipped 0.6%, while the $Nasdaq Composite Index (.IXIC.US)$ edged 0.2% lower. The $Dow Jones Industrial Average (.DJI.US)$ fell 336 points, or 1%.
AU Market Watch
The $S&P/ASX 200 (.XJO.AU)$ dropped 0.76 per cent in early trade in broad losses, tracking a decline on Wall Street on disappointing earnings and soft US retail sales.
Fertiliser maker Incitec Pivot was the biggest laggard, down 5.3 per cent as its net profit in the first half of fiscal 2023 took a hit on lower commodity prices and higher gas costs.
Shares in global malt supplier United Malt bounced 0.7 per cent despite swinging to a net loss of $14 million and scrapping an interim dividend.
Retailer Best & Less stock skidded 3.6 per cent after it slashed net profit guidance to between $10 million and $12 million for the second half of the year, from $18 million and $20 million previously expected.
The major banks and mining companies including those operating in gold and lithium fell.
RBA could lift interest rates in June, economists say
The chance of a post-budget interest rate rise is rising and the Reserve Bank of Australia could lift the cash rate as soon as next month if Wednesday's wages figures exceed expectations, amid fears that weak productivity could embed high inflation.
Money markets ascribe a 58 per cent chance of an interest rate increase by August, compared to 34 per cent last Friday and before the release of the minutes of the RBA's May 2 board meeting on Tuesday. However, markets are pricing in just a 12 per cent chance of a move higher in June.
Stocks to Watch
$Incitec Pivot Ltd (IPL.AU)$: Net profit at fertiliser maker Incitec Pivot (IPL) fell 6 per cent to $362 million in the first half of fiscal 2023 due to lower commodity prices and higher gas costs, but the company is optimistic on the outlook.
Incitec expects a positive earnings skew in the second half for its explosives businesses. Favourable agricultural conditions are expected in eastern Australia for the remainder of the financial year, and fertiliser earnings are forecast to rise in the second half.
The company kept its interim dividend at 10¢ a share, franked at 60 per cent.
$Best & Less Group holdings Ltd (BST.AU)$: Mother's day spending lifted retailer Best & Less' sales 1.8 per cent to $222 million in the 19 weeks of trading in its second half of fiscal 2023, from the last period.
But the company lowered net profit guidance to between $10 million and $12 million in the second half of the year, down from a guidance of $18 million and $20 million.
$United Malt Group Ltd (UMG.AU)$: Global malt supplier United Malt swang to a net loss of $14 million in the first half of fiscal 2023, from a net profit of $6 million in the last period and will not pay an interim dividend.
Revenue increased by 16 per cent to $757 million due to improved contract pricing and higher barley prices.
$Appen Ltd (APX.AU)$: Troubled artificial intelligence data services company Appen Group has completed the institutional part of its $60 million equity raising. The deal included a $21.2 million placement at $1.85 per share and $8.8 million institutional entitlement offer.
$Temple & Webster Group Ltd (TPW.AU)$: Online furniture retailer Temple & Webster reiterated full year earnings guidance between 3 per cent and 5 per cent after trimming sales losses to 5 per cent in the first half.
The company said its business had returned to year-on-year growth as it completes cycling comparisons against COVID-impacted periods, with trading in the past four weeks up 10 per cent versus the previous period.
Temple & Webster has bought back $4.1 million of shares so far out of an up to $30 million previously announced.
Trading Ex-div: None
Dividends Paid: None
Listing: None
Source: Dow Jones Newswires, AFR
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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