ASX Update: Uranium producers lead as market rebounds

The share market clawed back some of yesterday’s heavy losses as energy producers rallied with crude and uranium prices.

A day after falling almost 2 per cent to its heaviest loss since June, the S&P/ASX 200 bounced 38 points or 0.55 per cent.

A major dividend upgrade boosted Woodside Energy. Speculative and gold stocks rebounded after copping some of the worst of yesterday’s selling.

What’s driving the market

The ASX 200 rebounded after US stocks fell less overnight than futures action implied during yesterday’s bloodletting here. The S&P 500 declined 0.67 per cent. The US benchmark briefly turned positive before falling away again in the final hour.

Australian traders were also encouraged by steady US futures this morning. S&P 500 futures were flat at the halfway mark in Australia.

The bounce came as investors mull what happens next following a volatile year on world markets. The S&P 500 lost around a quarter of its value as it slid into a bear market earlier this year before bouncing nearly 20 per cent.

“The only thing missing is for stocks to trade in a sideways holding pattern, and that’s precisely what I think comes next,” Tony Sycamore, analyst at City Index, said.  

“As witnessed on Friday night, the Fed will likely sound hawkish and push back on any premature material easing in financial conditions that come via higher stock prices. On the downside, the interplay between recession fears and higher rates that flamed tail risks and drove U.S equity markets to the June lows have eased.

“Based on the above reasons, we think the most likely scenario is for the S&P500 to trade within a 4300/3950 type range trade for the next two months.”

The looming month-end may bring fleeting respite to the ASX from overseas pressures. The ASX 200 is on track for a second-straight monthly advance provided it does not fall more than 60 points from current levels. Tomorrow may bring some of the “window dressing” commonly seen on the last trading session of each month before institutional investors report to clients.

However, September’s arrival will inspire little confidence. The market has fallen on each of the last two Septembers, interrupting lengthy win streaks as dividend payments drained stock prices. September is also historically the weakest month of the year in the US.  

Going up

Uranium stocks soared after a closely-followed exchange-traded fund of miners jumped 7.39 per cent overnight. The Global X Uranium ETF closed at its highest in 12 weeks.  

Bannerman Energy spiked 23.85 per cent. Alligator Energy put on 18.42 per cent, Elevate Uranium 16.11 per cent and Paladin Energy 6.17 per cent.

Woodside Energy hit a two-year high on news shareholders will receive a jumbo dividend of US$1.09 per share following a merger with BHP’s petroleum business. This year’s interim payment is more than three times the 30 US cents paid last year.

First-half underlying profit after tax grew 414 per cent to US$1.819 billion. Sales volumes increased 11 per cent. The share price touched $36.68 before paring its rise to $35.95, a gain of 1.7 per cent.

Shareholders in diagnostic imaging business Healius will also receive an increased dividend. The firm will pay a final dividend of 16 cents, up 20.8 per cent, after more than doubling underlying profit to $309.3 million. The share price edged up 3.38 per cent.

The rebound in nickel prices since Russia’s invasion of Ukraine helped IGO lift underlying earnings 51 per cent to a record $717 million. Net profit fell 40 per cent to $331 million as the company absorbed rival producer Western Areas. The share price improved 2.09 per cent.

At the speculative end of the market, the S&P/ASX Emerging Companies Index bounced 0.94 per cent. The Small Ords firmed 0.75 per cent.

In the gold space, Northern Star gained 2.48 per cent. Newcrest bounced 0.86 per cent from its lowest level since 2016.

Going down

Copper and gold miner Sandfire fell 5.51 per cent as full-year profit dipped despite record sales revenues following the acquisition of the MATSA operation in Spain. Net profit after tax fell to US$111.4 million from US$128.6 million in FY21. Sales revenues were a record US$922.7 million.

A 20 per cent slide in full-year net profit helped pull Bravura Solutions down 7.48 per cent. The software maker’s costs increased 6 per cent. The firm warned conditions in its specialist labour market would remain “challenging” this fiscal year.

Bubs dropped 4.13 per cent after a rebound in China and a breakthrough into the US market helped the infant formula manufacturer slash its full-year loss by 85 per cent to $11.4 million. Revenues more than doubled to $89.3 million.

Luxury online retailer Cettire faded 2.86 per cent after forecasting strong sales momentum will help it turn earnings positive this fiscal year. Sales revenue increased 127 per cent in FY22 to $209.9 million. July and August delivered revenue increases of 67 per cent, versus the prior comparative period.

Other markets

A mixed session in Asia saw the Asia Dow trade unchanged, China’s Shanghai Composite fall 0.54 per cent, Hong Kong’s Hang Seng lose 1.67 per cent and Japan’s Nikkei rise 1 per cent.

Oil gave back some of last night’s 4.1 per cent advance. Brent crude retreated 48 US cents or 0.5 per cent to US$102.45 a barrel.

Gold slipped US$2.80 or 0.15 per cent to US$1,746.90 an ounce.

The dollar eased 0.35 per cent to 68.83 US cents after trading above 69 US cents overnight.