Retailers spring surprise

THE sharemarket finished slightly lower yesterday as investors abandoned energy and resource stocks and found value in the beaten-down retail sector.

By InvestSMART · 23 Aug 2012

By InvestSMART ·
23 Aug 2012

Comments

THE sharemarket finished slightly lower yesterday as investors abandoned energy and resource stocks and found value in the beaten-down retail sector.

At the close, the benchmark S&P/ASX 200 Index was down 7.4 points, or 0.17 per cent, at 4376.

CMC Markets analyst David Land said it was strange to see energy and resource stocks under pressure as retail stocks posted gains. "It was quite a mixed day," Mr Land said.

"Materials were under pressure for most of the day and energy stocks were weighed down."

Some smaller retail stocks surprised the market with better than expected earnings results.

BHP Billiton's 34.8 per cent slump in full-year net profit was broadly better than expected, leading its shares to finish 11?, or 0.3 per cent, lower at $33.16. Rio Tinto fell 31?, or 0.6 per cent, to $54.10.

The big banks were mixed, with Commonwealth falling 46?, or 0.8 per cent, to $55.34. ANZ was up 0.04 per cent to $24.96, while Westpac fell 0.08 per cent to trade at $24.89 and National Australia Bank dropped 11? to $25.26.

Seven West Media jumped 0.5 per cent to $1.49, following a net profit increase of 97.1 per cent to $226.9 million.

Woodside closed 3.3 per cent lower at $34.80 after the company's first-half profit fell slightly on the costs of starting up its massive Pluto liquefied natural gas project in Western Australia.

In the retail sector, Reject Shop shares rose 8.1 per cent to $10.59 after the discount retailer posted a full-year net profit of $21.92 million, up 35.6 per cent from the previous 12 months to June 30. Noni B rose 10 per cent to 82? after the women's fashion retailer delivered a tenfold increase in full-year profit.

National turnover was 1.59 billion shares, worth $4 billion.

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

How did the ASX 200 perform yesterday and what were the main drivers?

The benchmark S&P/ASX 200 finished slightly lower, down 7.4 points (about 0.17%) at 4,376. Investors moved away from energy and resource stocks while buying into beaten-down retail names, producing a mixed market.

Why were energy and materials stocks under pressure on the day?

The article notes investors abandoned energy and resource stocks, and materials were under pressure for most of the day. CMC Markets analyst David Land described it as a mixed session where energy and materials weighed on the market while other sectors outperformed.

What happened with the big miners BHP Billiton and Rio Tinto?

BHP Billiton reported a 34.8% slump in full-year net profit but the result was broadly better than expected; its shares finished about 0.3% lower at $33.16. Rio Tinto fell roughly 0.6% to $54.10.

How did the major Australian banks trade during the session?

The big banks were mixed: Commonwealth Bank fell around 0.8% to $55.34, ANZ was essentially flat (up about 0.04% to $24.96), Westpac slipped about 0.08% to $24.89, and National Australia Bank fell to $25.26.

Which retail stocks surprised investors and why should everyday investors notice them?

Smaller retail stocks surprised the market with stronger-than-expected earnings. The Reject Shop jumped 8.1% to $10.59 after reporting a full‑year net profit of $21.92 million (up 35.6%). Noni B rose about 10% after delivering a tenfold increase in full‑year profit. These moves show how earnings beats in beaten-up retail names can attract investor interest.

How did media and energy companies like Seven West Media and Woodside perform?

Seven West Media rose 0.5% to $1.49 after reporting a 97.1% increase in net profit to $226.9 million. Woodside closed 3.3% lower at $34.80 after first‑half profit fell slightly, partly due to start‑up costs for its Pluto LNG project in Western Australia.

What does the day’s market action tell investors about sector rotation?

The session highlights a sector rotation where investors reduced exposure to energy and materials and sought value in the retail sector, especially in smaller companies that reported better‑than‑expected earnings. It underscores that stock performance can diverge by sector even when the overall index is flat to down.

What was overall market turnover and does that matter to investors?

National turnover for the day was 1.59 billion shares worth about $4 billion. Turnover gives everyday investors a sense of market liquidity and participation—higher turnover can make it easier to buy and sell shares without large price swings.