AU Morning Wrap: ASX Drops 1.2%, Tech Sector Suffers

Moomoo News AU wrote a column · Aug 25, 2023 08:44

G'day, mooers! Check out the latest news on today's stock market!
• US S&P 500 has best day since June
• ASX drops 1.2%, Wesfarmers rallies, tech sector suffers
• Stocks to watch: Pilbara Minerals, Ardent Leisure, Rio Tinto
- Moomoo News AU

AU Morning Wrap: ASX Drops 1.2%, Tech Sector Suffers

Wall Street Summary

Technology and real-estate shares lifted the S&P 500 to its best daily performance since June despite surveys of purchasing managers that flashed warnings of economic slowdown on both sides of the Atlantic.

The $S&P 500 Index (.SPX.US)$ rose 1.1%. Energy shares were the only segment of the broader index that ended the day down, drifting lower along with prices for oil and gas futures.

The $Dow Jones Industrial Average (.DJI.US)$ added 0.5% or about 184 points. The $Nasdaq Composite Index (.IXIC.US)$, which is loaded with tech stocks, gained 1.6% and is now up 31% this year thanks to investor excitement over artificial intelligence and chip makers powering the latest computing boom.

AU Market Watch

The $S&P/ASX 200 (.XJO.AU)$ fell 1.2 per cent minutes after opening on Friday, tracking Wall Street's drop as investors were nervous ahead of Federal Reserve chairman Jerome Powell's address at a central banks' annual meeting in Jackson Hole.

All 11 sectors were in the red with tech stocks leading the loss.

$Wesfarmers Ltd (WES.AU)$ rallied 1 per cent after its $2.6 billion profit beat expectations. The conglomerate also lifted its total dividends to $1.91, an increase of 6.1 per cent.

Mining company $PLS (9695.MY)$ slumped 5.9 per cent despite net profit up nearly fivefold to $3.4 billion.

Insurance group $Insurance Australia Group Ltd (IAG.AU)$ fell 1.8 per cent. Two of its subsidiaries are being sued by the Australian Securities and Investments Commission (ASIC) for having misled customers about the loyalty discounts available for certain types of home insurance.

Entertainment group $Ardent Leisure Group Ltd (ALG.AU)$ jumped 4.7 per cent after it trimmed its loss by 71 per cent to $17 million. It is planning to buy back 48 million of its shares.

Essential infrastructure services provider $Ventia Services Group Ltd (VNT.AU)$ shed 1.5 per cent. The company lifted dividend and affirmed profit guidance at the top end of its forecast range.

Digital lottery reseller $Jumbo Interactive Ltd (JIN.AU)$ retreated 0.5 per cent. It posted a 7.6 per cent profit increase and noted the worst decline in lottery ticket sales in a decade.

The major banks fell. Weaker iron ore prices weighed on mining giants. $BHP Group Ltd (BHP.AU)$ declined 1.7 per cent, $Rio Tinto Ltd (RIO.AU)$ 2.2 per cent and $Fortescue Ltd (FMG.AU)$ fell 2.1 per cent.

Stocks to Watch

$Pilbara Minerals Ltd (PLS.AU)$: Pilbara Minerals says there is potential to boost production at its flagship Pilgangoora lithium mine well beyond a million tonnes a year after reporting a full-year net profit after tax of $2.4 billion.

The company announced a 35 per cent boost in its ore reserves to 214 million tonnes to coincide with the full-year results.

$Jumbo Interactive Ltd (JIN.AU)$: Digital lottery reseller Jumbo Interactive says the decline in lottery ticket sales for the last financial year was one of the worst of the last decade, but the company still delivered earnings and revenue growth.

The board declared a final, fully franked dividend of 20¢ per share after reporting a 13.9 per cent increase in revenue to $118.7 million and a 7.6 per cent climb in statutory earnings [before interest, tax, depreciation and amortisation] from $54 million to $58.1 million.

Underlying earnings [before interest, tax, depreciation and amortisation] climbed 6.9 per cent to $58.9 million.

$Aussie Broadband Ltd (ABB.AU)$: Aussie Broadband said it had increased its share of the national broadband market to 7.6 per cent as the telecommunications group's annual net profit quadrupled to $21.7 million.

The company, which previously had a 6.5 per cent share of the NBN market excluding satellite connections, said broadband connections had risen 18 per cent over the year to 691,172.

The increase helped lift group revenues 23 per cent to a record $788 million.

$Ardent Leisure Group Ltd (ALG.AU)$: Ardent Leisure reported a $17 million loss after stripping out the impact of completing the sale of its United States-based Main Event business during the year ended June 30.

The loss represents a 71 per cent improvement on the previous year, when COVID-19-imposed lockdowns hit visitation numbers hard. But Ardent said things were improving, even though international visitation remained significantly lower than pre-COVID levels.