Record earnings results fail to tempt investors into market
Market heavyweight Commonwealth Bank posted a record cash profit of $7.8 billion, while blood products and vaccine provider CSL lifted annual profit by 19 per cent to $US1.22 billion ($1.33 billion).
But this failed to move the market, with the benchmark S&P/ASX200 index dipping 0.3 points to 5157.4, and the broader All Ordinaries down 0.6 points at 5141.
CMC Markets analyst Ric Spooner said there were mixed reactions from traders.
"Neither of them [CBA and CSL] were bad results," he said. "Perhaps the guidance was not quite as strong as some people had been looking for."
Commonwealth Bank shares shed 8¢, or 1.1 per cent, to $73.73, while the other big banks made gains. ANZ was 28¢ higher at $30.15, Westpac increased 33¢ to $31.51, and NAB gained 26¢ to $31.32.
"Traders have compensated to some extent by buying in other banks, as people have rotated out of CBA," Mr Spooner said.
He said solid earnings reports were not enough to accelerate market activity.
"There's a bit more caution creeping in, and so we see a bit more profit-taking in the market."
Investors were waiting on further economic indicators from the US and China, he said. "We're holding steady based on results, and I think we'll be needing a bit of direction now, from a macro point of view."
The spot price of gold in Sydney finished at $US1320 an ounce, down $US19.40.
Meanwhile, the dollar has fallen back below US91¢ after strong US July retail figures helped the greenback rally. Late on Wednesday, the dollar was trading at US90.98¢, down from US91.38¢ on Tuesday.
Easy Forex currency dealer Tony Darvall said the local currency was getting some support, despite the rally in the US dollar. "It's potentially going to stay in a bit of a range here; there's talk of buyers in the lower US90¢ area.
"The Aussie itself is benefiting from the upbeat change in view from China in the past week or so.
"If you do see a soft landing from China, then you should see Australia hold up relatively well."
Frequently Asked Questions about this Article…
Despite strong results from major companies, the S&P/ASX200 dipped marginally because investors showed mixed reactions and some profit-taking. Analysts noted that guidance may not have met elevated expectations, and traders were waiting for clearer direction from larger macro indicators out of the US and China.
Commonwealth Bank reported a record cash profit of $7.8 billion. However, CBA shares fell about 8¢ (1.1%) to $73.73 as investors rotated out of CBA into other bank stocks following the result.
CSL lifted annual profit by 19% to US$1.22 billion (about A$1.33 billion). Even with that strong profit increase, CSL's result did not meaningfully lift the overall market — investors still reacted cautiously.
Traders rotated into other major banks: ANZ rose 28¢ to $30.15, Westpac increased 33¢ to $31.51, and NAB gained 26¢ to $31.32, as some investors moved out of CBA and into peer banks.
CMC Markets analyst Ric Spooner said reactions were mixed — the results weren't bad but guidance may have fallen short of expectations. He highlighted growing caution, some profit-taking, and that markets were waiting for macro direction from the US and China.
Yes. The article notes investors were waiting on further economic indicators from the United States and China to provide the macro-level direction the market seemed to need.
The spot price of gold in Sydney finished at US$1,320 an ounce, down US$19.40 on the day.
The Australian dollar fell back below US91¢, trading at about US90.98¢ (down from US91.38¢). Currency dealer Tony Darvall said the local dollar was getting some support and could trade in a range around the lower US90¢ area, helped by a more upbeat view on China and the prospect of a soft landing there.
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