JB Hi-Fi shines over losses
The benchmark S&P/ASX 200 finished at the day's low, down 11.8 points, or 0.2 per cent, to 4959.5, while the broader All Ordinaries lost 9.1 points, or 0.2 per cent, to 4980.3.
Markets closed for the holidays included Japan, China, Hong Kong, Singapore, South Korea and Taiwan.
After a major surge on the market in 2013 so far, a spotlight is being placed squarely on earnings season in an attempt to validate the strong run.
"People start saying, 'Well there's momentum building, let me get on that horse and give it a ride, too.' I still believe that if there is going to be a sustained run-up there needs evidence out there that it's justified, and key justification is profits," said Patersons Securities strategist Tony Farnham.
Reporting on Monday, JB Hi-Fi announced its first-half net profit rose 3 per cent to $82 million. This caused the stock to soar 17.1 per cent to $12.89, the highest since December 2011.
Other retailers jumped on the JB Hi-Fi bandwagon, with Harvey Norman adding 6.8 per cent to $2.33, Myer gaining 3.1 per cent to $2.67 and David Jones rising 3 per cent to $2.70.
Mr Farnham said investors would have to wait for other retailers to report before it became clear whether the improvement was across the retail sector or a sign that JB Hi-Fi was beginning to get the best of its competitors.
Despite securing a win in its long-running legal battle with Fortescue Metals over the use of its rail lines in the Pilbara, Rio Tinto failed to gain much ground, adding just 0.2 per cent to $69.45.
Rio will report its earnings on Thursday. On the other side of the decision, Fortescue rose 1.2 per cent to $5.
The banks were mixed, with ANZ the biggest mover, falling 1.2 per cent to $27.77. Commonwealth Bank finished up 0.4 per cent at $65.12, as the bank prepares to release its earnings report on Wednesday.
Home-loan approvals numbers released by the Bureau of Statistics showed a third consecutive month of falls, with the number of loans down 1.5 per cent from November to December.
"Towards the final part of the year, the housing market had not picked up to the extent that people were hoping for, from a borrowing perspective," said Mr Farnham.
The dollar slipped below $US1.03 in late trading, fetching $US1.0295, its lowest since October.
Frequently Asked Questions about this Article…
The sharemarket closed lower mainly because the mining sector weighed on performance and there were limited overseas leads as major Asian markets were shut for Lunar New Year holidays. The benchmark S&P/ASX 200 finished down 11.8 points (‑0.2%) at 4959.5 and the All Ordinaries fell 9.1 points (‑0.2%) to 4980.3.
JB Hi‑Fi reported a first‑half net profit rise of 3% to $82 million, which sent its shares up 17.1% to $12.89 — the highest since December 2011. That result also lifted other retailers, with Harvey Norman up 6.8%, Myer up 3.1% and David Jones up 3% as investors reacted positively to the earnings news.
Not necessarily — analysts say investors need to wait for other retailers’ reports to tell if the improvement is sector‑wide or specific to JB Hi‑Fi. Earnings season will provide the profit evidence needed to validate whether the retail rally is sustainable.
Rio Tinto secured a win in its long‑running legal dispute with Fortescue Metals over Pilbara rail usage, but Rio’s shares only rose 0.2% to $69.45. Fortescue rose 1.2% to $5. Rio Tinto was also due to report earnings on Thursday, which investors were watching for further direction.
Bank stocks were mixed: ANZ was the biggest mover, falling 1.2% to $27.77, while Commonwealth Bank edged up 0.4% to $65.12 as it prepared to release its earnings report on Wednesday.
The Bureau of Statistics showed home‑loan approvals fell for a third consecutive month, down 1.5% from November to December. Analysts noted the housing market hadn’t picked up as much as hoped from a borrowing perspective late in the year.
The Australian dollar slipped below US$1.03, trading at US$1.0295 — its lowest level since October. Currency moves matter to investors because a weaker AUD can affect company earnings, import/export costs and the attractiveness of Australian assets to overseas buyers.
Investors should focus on profit results across sectors to see if recent market momentum is justified. Key things to watch include upcoming retailer results following JB Hi‑Fi, miners’ earnings such as Rio Tinto’s report, and major bank results — profits will be the main evidence for a sustained market run.
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