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Closing Bell 25 August

Grady Wulff
August 25, 2022

The Australian market extended its gains into Thursday, adding just under 1% to close the session in positive territory led by a rally for real estate and energy stocks.

The big story of today’s session was Australian investment fund and trustee group Perpetual (ASX:PPT) announced it is acquiring its competitor, Pendal Group (ASX:PDL) in a cash and scrip deal to create a $201 billion global asset manager.

Uranium stocks soared during today’s session following reports Japan is considering the development of new nuclear reactors, indicating the country has a renewed focus on nuclear energy, years after many of the country’s plants were shut down. Uranium stocks on the ASX jumped following the reports including Paladin Energy (ASX:PDN) surging over 20% in two sessions and uranium-linked stocks like Silex Systems (ASX:SLX) up 6.8% today. Paladin Energy (ASX:PDN) was the winning stock today, up around 20% over the last two sessions following the reports out of Japan. Insignia Financial (ASX:IFL), formerly IOOF, also soared over 11% today on the back of FY22 results being released including the company swinging to a profit in the financial year.

On the losing front, Woolworths (ASX:WOW) shares were sold off today following the release of the company’s FY22 results including EBIT falling 2.7% and the company taking lower margins as customers shift away from price-inflated products like beef and fresh veggies. Fashion retailer City Chic (ASX:CCX) also fell out of favour with investors today, with the company’s share price tumbling more than 20% also on the release of FY22 results. Despite reporting revenue growth of 39% and underlying NPAT up 7.7%, investors were more shocked to see City Chic’s inventory almost tripling and the company diving into a negative cash flow position.

On the economic front today, across the ditch in New Zealand retail sales for the second quarter fell 2.3%, which was well below the market expectations of a 1.7% rise. This is the second consecutive quarterly decline in retail sales which raises the risk that the NZ economy fell into a technical recession in the first half of the year.

US Crude Oil Inventories data was also released today showing stockpiles of the commodity in the US declined by 3.3 million barrels, which added to the upward price pressure on crude oil today.

The most traded stocks by Bell Direct clients today were Djerriwarrh Investments (ASX:DJW), Whitehaven Coal (ASX:WHC) and Woodside Energy (ASX:WDS).

As for what to watch overnight, US GDP data for the second quarter will be released just before midnight tonight Australian eastern time which investors have been waiting for, to see whether the world’s largest economy is in a technical recession or not.

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