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Australian shares experienced a modest increase early this afternoon, although disappointing results from biotechnology firm CSL Ltd (ASX:CSL) and recruitment platform Seek Ltd tempered overall gains.
The S&P/ASX 200 Index (ASX:XJO) edged up by 0.3%, or 21.5 points, to 7835.2. This follows a 0.5% rise yesterday, marking the index's fifth consecutive day of gains. Despite the overall positive movement, the benchmark was largely flat throughout the morning session.
Among the sectors, real estate and mining led the gains, while the healthcare sector lagged significantly, down 2.6%. This decline was largely driven by a 4% drop in CSL shares. Despite CSL’s forecast for double-digit earnings growth this year, the company's guidance for net profit after tax and amortisation (NPATA) fell short of expectations, leading to one of the largest daily drops for CSL this year. Craig Wong-Pan, an analyst at RBC Capital Markets, noted that while a conservative FY25 outlook was anticipated, the guidance was perceived as weaker than expected.
Seek Ltd (ASX:SEEK) was another major underperformer, with its shares falling nearly 10% following a reduction in job advertisements across the region, which adversely affected its financial results.
On a more positive note, Challenger Ltd (ASX:CGF) saw a significant rise of 6.5% after reporting a 17% increase in normalized net profit for the 2024 fiscal year.
The energy sector also benefited from a surge in oil prices overnight. Woodside Energy Ltd (ASX:WPL) and Santos Ltd (ASX:STO) saw gains, with Santos up 0.9% and Beach Energy Ltd (ASX:BPT) rising 2.1%. Brent crude prices increased by over 3% yesterday, surpassing $US80 per barrel, driven by expectations of a tighter global oil supply due to potential geopolitical tensions in the Middle East. Brent was trading at $US81.53 early this afternoon.
In other ASX movements, the major banks performed well, with ANZ Banking Group Ltd (ASX:ANZ) leading the way, up 1.4%. Index-heavyweights Rio Tinto Ltd (ASX:RIO) and BHP Group Ltd (ASX:BHP) also made gains, with Rio Tinto increasing by 1.4%, BHP by 0.8%, and Fortescue Metals Group Ltd (ASX:FMG) by 0.6%.
Economic news revealed that Australia's Wage Price Index (WPI) rose by 0.8% in the June quarter compared to the March period, falling slightly short of the forecasted 0.9% increase. On an annual basis, wage growth rose 4.1%, exceeding expectations of 4%. This data suggests that the peak in pay growth may have passed. Brendan Rynne, Chief Economist at KPMG, stated that the figures provide reassurance to the Reserve Bank of Australia (RBA) that falling services inflation should accelerate. This aligns with the RBA's recent decision to maintain the cash rate at 4.35% until February 2025.
The Australian dollar saw a slight increase, trading at US65.90¢.
In individual stock movements, James Hardie Industries plc (ASX:JHX) saw a decline of 3.6% despite a 1% rise in first-quarter adjusted earnings. Conversely, online retailer Temple & Webster Ltd (ASX:TPW) surged nearly 24%, marking its best performance in two years following the release of strong financial results.
