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Morning Bell 23 February

Sophia Mavridis
February 23, 2022

Amid heighted concerns for the Russia and Ukraine conflict, the ASX200 closed 1% lower yesterday. Only energy, consumer staples and healthcare sectors managed to post gains. Tech shares declined the most, sensitive to expectations of tighter monetary policy.

Cochlear (ASX:COH) advanced 9%, closing at $207.37, after a positive earnings report. This included a 20% rise in underlying net profit, as well as improved dividend. Other companies that made the top 10 after reporting their earnings yesterday included Costa Group Holdings (ASX:CGC), HUB24 (ASX:HUB), and Coles (ASX:COL). Meanwhile, Nanosonics (ASX:NAN) declined the most after reporting a large profit fall. Its share price closed just over 13% lower.

The most traded stocks by Bell Direct clients yesterday included Star Entertainment (ASX:SGR), Alumina (ASX:AWC) and BHP Group (ASX:BHP).

European markets closed mixed, while US equities were in the red. The Dow dropped 480 points or 1.4%, falling for the fourth straight session. The S&P500 down 1% and the Nasdaq down 1.2%. It was a negative start to the trading week, after the Presidents’ Day holiday, as market sentiment was dented by intensifying concerns between Russia and Ukraine. Additionally, expectations of tighter monetary policy have put pressures on the market.

What to watch today:

  • Australian shares are expected to rise. The SPI futures are suggesting a 0.28% lift at the open this morning.
  • The oil price is trading at US$92, after jumping more than 4% to an over 7-year high, on worries of the possibility of supply disruptions as tensions escalate in Europe.
  • The gold price reached its highest level in nearly 9-months, while the seaborne iron ore price is higher at US$143 a tonne.
  • Some companies that are reporting today include APA Group (ASX:APA), Domino’s Pizza (ASX:DMP), WiseTech (ASX:WTC), Rio Tinto (ASX:RIO), St Barbara (ASX:SBM) and Woolworths (ASX:WOW).
  • Stocks going ex-dividend today include AGL Energy (ASX:AGL), Codan (ASX:CDA), JB Hi-Fi (ASX:JBH), Magellan Financial Group (ASX:MFG), and Netwealth Group (ASX:NWL). Remember this often sees shares fall as investors take their profits.

Trading Ideas:

  • Bell Potter have a Speculative Buy rating on Cluey (ASX:CLU). Cluey is an education technology company, providing personalised online tutoring and educational services for school students. The company delivered a strong half-year report with metrics broadly in-line with Bell Potter’s forecasts. Bell Potter have a $1.50 valuation on the CLU. The stock last closed at $1.00, implying 50% share price growth in a year.
  • Trading Central have identified a bullish signal in Woolworths (ASX:WOW), indicating that the stock price may rise from the close of $35.20 to the range of $36.60 to $36.90, over 20 days, according to the standard principles of technical analysis. Woolworths is also set to report its half year earnings today. Bell Potter expect NPAT of $808.2m.

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