ASX opens flat; BHP, RIO, FMG surge on rising iron ore prices

Highlights

  • The ASX 200 was trading 0.9 points up in early trade.
  • Oil prices continued their rally on Monday to a multi-year peak.
  • Market breadth has been on a positive side, with eight out of the 11 sectors trading in the green.

On Tuesday, the Australian share market opened on a flat note, but the US markets had a weak overnight closing on Wall Street as concerns over global energy supply clouded investor sentiment just before the start of the earnings season. The ASX 200 was trading 0.9 points up in early trade.

Stock prices flashing on a trading screen

Image Source: © Embe2006 | Megapixl.com

Oil prices continued their rally on Monday to a multi-year peak, supporting US materials and energy stocks, but fears over supply chain snags caused Wall Street indices to give up early gains.

The S&P 500 lost 0.69% to end at 4,31.19 points, while the NASDAQ Composite was down 0.64% to 14,486.20. The Dow Jones Industrial Average ended the session 0.72% lower at 34,496.06.

Read More: Know about Australia’s new low-cost airline set for early 2022 launch

How has the market performed so far?

As of 11:00 AM AEDT, the ASX 200 made some quick gains and was trading 0.2% or 14.5 points up at 7,314.4, while the ASX All Ordinaries index was up 0.17% or 12.6 points to 7,613.7. The rising iron ore price sent local miners BHP Group Limited (ASX:BHP), Rio Tinto (ASX:RIO) and Fortescue Metals Group Limited (ASX:FMG) higher in early trade.

Top 5 ASX gainers and losers

Data Source: ASX Website (as of 12 October 2021, 11:00 AM AEDT)

The top ASX 200 contributors were Sims Limited (ASX:SGM) and Alumina Limited (ASX:AWC), both gaining 4.3% and 3.95%, respectively. On the flip side, Clinuvel Pharmaceuticals Limited (ASX:CUV) and Corporate Travel Management Limited (ASX:CTD) are losing the most, shedding 4.6% and 3.42%, respectively.

Market breadth has been on a positive side, with eight out of the 11 sectors trading in the green. The materials sector is leading with a 1.34% gain, mostly offset by a decline of 1.03% in the IT sector.

Newsmakers

  1. Westpac Banking Corp (ASX:WBC)
  • The management has informed that its 2H FY21 profit will take a hit of AU$1.3 billion.
  • The primary reason is a AU$965 million write-down across its institutional bank.
  • It also made a provision of AU$172 million in legal costs, customer refunds and litigation provisions.
  1. Telstra Corporation Limited (ASX:TLS)
  • The management has stuck to the FY22 guidance of revenue between AU$21.6 billion to AU$23.6 billion.
  • It also expects capital expenditure between AU$2.8 billion to AU$3 billion over FY22.
  • Telstra’s long-term T25 strategy would help in a cost reduction of AU$500 million between FY23 to FY25.
  1. CSL Limited (ASX:CSL)
  • In the recent AGM, the management put forward its expectation to clock a profit in the range of US$2.15 billion-US$2.25 billion in FY22.
  • Revenue growth on a constant currency basis is expected to be in the range of 2% to 5%.
  • However, the management has also raised concerns of a potential hit to gross margins due to increased cost.
  1. Newcrest Mining Limited (ASX:NCM)
  • Newcrest’s pre-feasibility studies across four new gold and copper projects indicate an internal rate of return of 16% or higher.
  • These new projects could help the company to increase its copper production by 37%.
  • They also offer a 50% reduction in cost per ounce for copper output.
  1. Security Matters Limited (ASX:SMX)
  • The company successfully has raised AU$3.1 million via a placement to strategic and sophisticated investors at AU$0.30 per share.
  • Proceeds from the placement will be used for a range of ESG business development initiatives among other activities.

Read More: Five ASX penny stocks that started October with a bang

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