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Morning Bell 12 April

Paulina Peters
April 12, 2022

The local market rose slightly higher yesterday, up 0.1%. Sectors wise, the market was mixed. The financials sector lifted 0.78% with all four of the big banks rising and NAB hitting a five-year high. While the tech sector was down 0.85%.

On the ASX200 leaderboard, GrainCorp (ASX:GNC) was the best performer, jumping an impressive 6.8%. The company’s recent guidance upgrade resulted in Wilsons increasing its earnings expectations for the company. Regis Resources (ASX:RRL) also gained, off the back of a rise in the gold price and a bullish broker note out of Credit Suisse.  Meanwhile, the worst performing stocks included AVZ Minerals (ASX:AVZ) and PolyNovo (ASX:PNV). The a2 Milk Company (ASX:A2M) fell 5.4% after Credit Suisse trimmed its earnings estimates and valuation in response to the lockdowns in China and lower birth rate assumptions.

The most traded stocks by Bell Direct clients yesterday included uranium producer Boss Energy (ASX:BOE), Ardent Leisure Group (ASX:ALG) and Zeotech (ASX:ZEO), which closed 6.4% higher.

Moving to the US, all three benchmarks closed in the red. The Nasdaq falling over 2% as tech shares slumped off the back of higher rate fears. The Dow closed more than 400 points lower and the S&P500 was down 1.7%.

What to watch today:

  • Following the negative session in the US, the futures are suggesting that the Aussie share market is set to open 0.29% lower this morning.
  • In commodities, the oil price slid about 4% to US$94.29 a barrel, its lowest level since February, as lockdowns in China continue to spark demand fears. The gold price was steady, trading slightly higher. Remember, while gold is considered a hedge against inflation, rate hikes increase the opportunity cost of holding the non-yielding bullion. And the seaborne iron ore price is trading at US$156 a tonne.
  • In economic news, business confidence for March will be released today. As a reminder, business confidence surged to 13 in February, which was the highest reading in four months, amid a decline in cases of the Omicron variant. Today’s reading for March is expected to come in lower. Stay tuned at 11:30am AEST.
  • Seven Group Holdings (ASX:SVW) is set to go ex-dividend today.

Trading Ideas:

  • Bell Potter have maintained its BUY rating on healthcare equipment and services company Pro Medicus (ASX:PME) with a price target of $55. PME announced its latest contract win in the US with the signing of Inova Health. It’s an 8-year deal generating minimum revenues of $32m. The deal increases contracted revenues to at least A$386m over 5 years. Now PME closed 1.1% higher yesterday to $48.50, which implies about 13% share price growth in a year.
  • Trading Central has a bullish signal on Genesis Minerals (ASX:GMD), indicating that the stock price may rise from the close of $1.95 to the range of $2.32 – $2.42 in the next 63 days according to standard principals of technical analysis.

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