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Highlights
- Australian shares opened with gains, boosted by technology sector performance.
- XRO rose 5% following impressive earnings growth.
- ORI faced a decline despite reporting solid annual results.
Australian shares experienced a positive opening, influenced by favorable inflation data from the U.S., which has strengthened the likelihood of an interest rate cut by the Federal Reserve. The benchmark S&P/ASX 200 Index rose by 0.4%, or 28.7 points, reaching 8222.1. The local currency saw a dip below US65¢ as the U.S. dollar continued its upward trajectory.
Technology Sector Surge Led by Xero
The technology sector received a significant boost from (ASX:XRO), which surged 5% following its robust half-year financial results. The accounting software company reported a 51% rise in earnings before interest, tax, depreciation, and amortization (EBITDA) to $311.7 million. Additionally, its net profit saw a substantial 76% increase, reaching $95 million for the six months ending September 30. These positive results underscored Xero’s strong performance, helping lift the broader technology sector in the ASX.
Meanwhile, on Wall Street, movements were relatively modest with the Dow Jones increasing by 0.1% and the S&P 500 by 0.2%, while the Nasdaq experienced a slight dip of 0.3%. U.S. consumer prices for October aligned with expectations, showing an increase of nearly half a percentage point, bringing inflation to 3.6%. This data has led to an increased expectation of a potential quarter-point rate cut in the near term.
Orica and Nufarm Witness Mixed Outcomes
(ASX:ORI), a key player in explosives manufacturing, saw a 2.6% decrease in its stock price despite reporting a full-year net profit of $525 million, alongside a 15% growth in earnings before interest and tax, which reached $806 million. The company announced an unfranked final dividend of 28¢ per share, yet the stock faced downward pressure.
(ASX:NUF), a chemical supplier specializing in agricultural products, saw a 5.1% increase in its share price. This occurred even as it disclosed a 29% reduction in underlying EBITDA, totaling $313 million for FY24, and a statutory net loss of $6 million. Despite challenges, Nufarm’s stock performed well in early trade.
GrainCorp and Cleanaway Developments
(ASX:GNC), another prominent name in the agriculture sector, experienced a 1.7% drop after its net profit declined significantly to $62 million in FY24, down from $250 million the previous year. The company maintained its ordinary dividend but lowered its special dividend by 6¢, declaring a total final dividend of 24¢ per share.
In a separate development, Cleanaway saw its stock rise by 1.1% amid regulatory scrutiny surrounding its proposed acquisition of Citywide, a Melbourne council-owned waste business. The Australian Competition and Consumer Commission (ACCC) raised concerns about potential monopolistic effects, as the acquisition could significantly expand Cleanaway’s position in Melbourne.
