Lockdown trading extended into Monday’s session as travel stocks took a beating while the companies that thrived during the height of the pandemic last year continued their recent burst.
The S&P/ASX 200 Index finished 0.01 percent, or 0.7 points, lower at 7307.3, in a day’s trading shaped by reactions to new COVID-19 cases popping up across the country and the tightening of restrictions.
“As Sydney goes into a two-week full lockdown and the rest of Australia feels in danger of following suit, the deteriorating local virus picture looks highly likely to dominate both the end of this financial year and the start of the financial year 2022,” said James Gerrish, portfolio manager at Shaw and Partners.
This weighed heavily on companies in the travel sector; Webjet dropped 4.7 per cent to $4.82, Qantas fell 4 per cent to $4.54, Flight Centre tumbled 3.5 per cent to $14.55 and Corporate Travel Management declined 2.7 per cent to $20.90.
Buy now pay later stocks also retreated after last week’s rally as Afterpay plunged 7.5 per cent to $119.30 and Zip Co dived 7.1 per cent to $7.65.
Gains posted by “stay-at-home” stocks offset some of the bruising suffered by the travel and tech sectors.
FLT Flight Centre
Redbubble was a major beneficiary, surging 8.2 percent to $3.71 while Kogan.com continued to trading strongly, backing up last week’s 11.1 percent raise with a 6.6 percent boost to $13. Temple & Webster soared 10.2 percent to $11.52.
Other consumer discretionary stocks rose including Harvey Norman, climbing 2.1 percent to $5.27, Premier Investments firmed 1.8 percent to $28.28, Wesfarmers gained 1.3 percent to $58.49 and JB Hi-Fi increased 1.3 percent to $49.68.
All three major supermarket companies finished the session higher too; Woolworths advanced 2.9 percent to $37.85 and Coles added 0.6 percent to $16.93.
Metcash rose 0.8 percent to $3.69 after posting strong increases in revenue and profit for the year ending June 30. The group also announced a $175 million share buyback.
Revenue (excluding charge-through sales) jumped 9.9 percent to $14.3 billion while underlying net profit rose 27.1 percent to $252.7 million. Metcash’s dividends for the year increased 40 percent to 17.5¢ a share having declared a final dividend of 9.5¢ a share.
“Independent retailers have held onto the market share gains through COVID-19,” said Citi analyst Bryan Raymond. “The $175 million off-market share buyback is a positive surprise post the strategy day given the higher payout ratio and increased CAPEX intensity.” The broker kept its “buy” rating on Metcash and its $4.10 target price.
Gold Road Resources said gold production at its Gruyere operations will fall to about 52,000 to 55,000 ounces (100 percent basis) and output for calendar 2021 will therefore be in the lower half of guidance because of disruptions to the site’s processing plant.
Consequently, all-in sustaining costs (AISC) for the June quarter are anticipated to be in the range of $1675 to $1800 an ounce, resulting in AISC rising for the year. The stock plummeted 7.4 per cent to $1.31 on the news.
The Star Entertainment Group has been forced to close The Star Sydney and implement restrictions at its The Star Queensland properties in response to measures put in place by state governments. Shares in the company fell 1.4 percent to $3.64.
China’s state planner said it expects a coal supply crunch to ease and coal prices to fall in July, the official Xinhua news agency said.
“With the growth of hydropower and solar power generation in the summer, as well as the increase in coal production and imports, the contradiction between coal supply and demand will tend to ease,” said the National Development and Reform Commission.
Oil stocks posted mixed results despite prices of the commodity reaching three-year highs. Santos climbed 0.7 percent to $7.25 and Oil Search edged 0.5 percent higher to $3.83, but Woodside Petroleum slid 0.04 percent to $22.53, Ampol tumbled 0.1 per cent to $28.13 and Beach Energy declined 0.4 per cent to $1.29.
Commonwealth Bank was the only major bank to rise, climbing 0.6 per cent to $99.87, while NAB fell 0.2 per cent to $26.12, ANZ declined 0.3 per cent to $28.19 and Westpac dropped 0.3 per cent to $25.82.