ASX flat but financials stand out

The ASX was flat but there was some interesting news, with Openpay in a hospital first and Twiggy’s ambitious plan brought forward.

The Australian sharemarket barely changed after a mixed US lead, with mining and tech stock falls offset by gains in the financial sector.

The S&P/ASX 200 closed just 6.2 points higher at 6773, while the All Ordinaries Index lifted 4.5 points to 7019.1.

OpenMarkets Group chief executive Ivan Tchourilov said fund manager Magellan was a standout, gaining 4.9 per cent to $45.39.

“The stock looks interesting at current levels after a period of underperformance relative to the market,” Mr Tchourilov said.

“Some perceived value is clearly starting to emerge for some investors today.”

ANZ added 0.57 per cent to $28.40, National Australia Bank inched 0.15 per cent higher to $26.14 and Westpac lifted 0.53 per cent to $24.58, but Commonwealth Bank eased 0.1 per cent to $86.40.

After the iron ore price dropped, Rio Tinto fell 2.16 per cent to $114.13, BHP dipped 0.19 per cent to $47.88 and Fortescue sank 4.14 per cent to $20.38.

Fortescue said it had brought forward its target to achieve carbon neutrality by 10 years to 2030, with chairman Andrew ‘Twiggy’ Forrest proclaiming: “We have joined the global battle to defeat climate change.”

Buy now, pay later market leader Afterpay retreated 4.49 per cent to $108.33, while smaller rival Zip Co backtracked 1.16 per cent to $8.49.

Openpay eased 1.52 per cent to $2.60 despite announcing it was the first BNPL to join the hospitals segment, entering into a partnership with St John of God Health Care.

Three of its hospitals – Murdoch and Mt Lawley in Perth, and Berwick in Melbourne – have started a six-month trial allowing patients to spread their costs for elective surgery across plans ranging from two to 12 months.

Both parties will decide if a full rollout should proceed after the trial ends.

Despite being flat overall, the local bourse “hung in there pretty well”, ThinkMarkets Australia analyst Carl Capolingua said.

While there wasn’t much of a move at an index level, gainers substantially beat losers in the ASX300.

“That’s impressive because it’s occurred despite US 10-year Treasury yields closing at their highest level since the start of the pandemic on Friday and our own 10-year bond yields creeping back up to within a few basis points of their recent highs,” Mr Capolingua said.

“The last few weeks have been all about higher rates spooking stocks.

“So, to see our market fairly firm even as yields edged higher, you start to think that investors have made peace with the idea that rates may continue to adjust higher in the short term.

“Markets are going to grow increasingly comfortable that interest rates are still historically very low.”

Qantas rose 3.77 per cent to $5.50 after another rating upgrade by a major broker following the federal government’s announcement last week of a $1.2bn tourism support package.

Citi, JP Morgan and ThinkMarkets last week upgraded their ratings for Qantas to “buy”, and Macquarie went to “outperform” on Monday.

“The consensus is clearly that there’s value there,” Mr Capolingua said, noting UBS already had a “buy” on the stock.

He said the energy sector was a strong performer but was “still undervalued”.

Santos advanced 1.8 per cent to $7.35, Origin put on 1.93 per cent to $4.75 and Woodside Petroleum found 1 per cent to $25.34.

“You look at the US energy sector and it’s up around 120 per cent since the COVID lows,” Mr Capolingua said.

“In comparison our energy sector is up only 70 per cent.

“We’re clearly lagging, and I think we can catch up.

“The sector also tends to be a natural hedge against inflation and higher interest rates and that’s a bonus right now.”

Gold producer Evolution Mining was up 2.53 per cent at $4.05 after announcing it will acquire Canadian gold explorer Battle North for $C343m ($A355.2m).

The Aussie dollar was fetching 77.39 US cents, 55.62 British pence and 64.83 Euro cents in afternoon trade.

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