ASX sinks at the close, seven sectors lower, Soul Patts record profit

Global sentiment continues to drive daily market movements in Australia, with the S&P/ASX200 falling 0.7 per cent on Thursday. Just two of the markets nine sectors finished higher, that being communications and consumer staples, up 0.1 per cent each, with the materials and technology sector the hardest hit by recessionary concerns, falling 1.1 and 0.8 per cent. United Malt Group (ASX:UMG) was a standout, gaining 5.5 per cent, while Megaport (ASX:MP1) fell by more than 8 per cent. But all the focus was on Washington H Soul Pattinson (ASX:SOL) with the conglomerate delivering a strong half year profit of $453 million, up 167 per cent on the prior year. Revenue increased by more than 70 per cent, supporting another strong dividend increase. Brickworks (ASX:BKW) managed a similar result, with a 13 per cent increase in revenue supporting a record profit result of $410 million. The group refused to provide guidance, noting short-terrm demand is strong but likely to come under pressure longer term.

Bond yields fall, sharp slowdown to come, Weebit Nano sinks on raising

Extending the commentary, Brickworks managing director Lindsay Partridge said a sharp slowdown in housing construction and renovations was likely toward the end of 2023, but that there should still be a strong 6-month period of demand. Sigma (ASX:SIG) gained 0.8 per cent despite the company missing expectations and announcing a significant increase in borrowing costs. The group deliver a profit of just $1.2 million from a loss of $7.2 million in the prior year, with the decision to half working capital requirements central to this. Revenue rose 6.2 per cent but management warned on ‘bleak’ economic conditions that will impact consumer spending. ASX-listed semi-conductor group Weebit Nano (ASX:WBT) went into a trading halt after receiving a warning from ASIC about recent moves in its share price. The group then announced it was looking to raise additional capital in the pursuit of growth and flexibility.

Markets rally on volatile day, Block, Coinbase sink, jobless claims fall

Global markets oscillated between gains and losses overnight, as investors digested the latest Fed meeting minutes and the implications of the cash rate moving to 5 per cent. Ultimately, the Nasdaq led the way, gaining 1.0 per cent, while both the S&P500 and Dow Jones posted small gains of 0.3 and 0.2 per cent each. Jobless claims fell to 191,000, the lowest level in three weeks as the labour market remains resilient to a clear slowing of the economy. Interestingly, the Swiss central bank chose to hike rates another 50 basis points despite the near failure of Credit Suisse while Citigroup Group CEO, Jane Fraser, was quoted as saying ‘this is not a credit crisis’ rather issues limited to just a few banks. Shares in Block Payments (NYSE:SQ) fell by more than 14 per cent after a short seler suggesting the company was facilitating fraud through its payment network. Meanwhile Coinbase (NYSE:COIN) fell by 14 per cent after the company received notice of an investigation by the market regulator.

Drew Meredith

Drew is publisher of the Inside Network's mastheads and a principal adviser at Wattle Partners.