The S&P/ASX 200 (ASX: XJO) is set to rise when the market opens on Friday. Here’s what ASX investors need to know.
ASX falls flat, travel shares boosted
The ASX 200 once again failed to capitalise on a strong US lead, finishing the day flat on Thursday. Dispersion continues to increase with share price movements between companies and sectors elevated.
On Thursday it was the travel sector benefitting, with the industrials sector finishing 1.0% higher on the back of the government’s latest stimulus announcement. Up to $1.2 billion will be directed towards subsidising flights between some of Australia’s major tourist destinations, ranging from Uluru to Cairns.
The news sent Flight Centre Travel Group Ltd (ASX: FLT) 9.3% higher with Qantas Airways Limited (ASX: QAN) only adding 2.3%. The news has been met with some concern given the limited number of routes and small group of potential beneficiary; local operators are clearly awaiting more specific tourism support. This effectively equates to a boost in income for airlines and the hope of a trickle-down impact for destination cities.
The outlook for Australian energy is becoming more complicated with news that Energy Australia will shut down the Yallourn power station in Victoria earlier than expected, thus far Origin Energy Ltd (ASX: ORG) has been unable to benefit, falling 0.2%.
Universities cashing up, AMP deal ‘too cheap’
Outside the technology sector, which fell another 1.6% as profit-challenged BNPL players followed the Nasdaq down, IDP Education Ltd (ASX: IEL) was the worst performer.
The education company, which offers university placements for students from around the world, fell 5.7% after its ownership group announced their intention to sell down their position. 40% of the company is owned by a group of 36 universities, with 25% of the company set to be ‘in specie’ transferred to owner and the remaining 15% to be sold. There is little doubt the university sector is struggling with borders closed, so this is clearly an opportunity extract some valuable funds for operations.
The AMP Ltd (ASX: AMP) saga continues, with brokers now suggesting the Joint Venture deal to sell a portion of AMP Capital’s Private Markets business may be ‘too cheap’; as the saying goes ‘you’re damned if you do and damned if you don’t’.
For the wine connoisseurs, Woolworths Group Ltd (ASX: WOW) Endeavour Drinks unit is apparently considering the purchase of the renowned Oakridge Wines in the Yarra Valley ahead of their impending demerger.
More records fall, tech returns
More records fell in the US overnight, which should provide a positive start for the ASX. The Dow Jones added another 0.6% after the stimulus package was finally approved, supporting states, industries and the masses through cash payments.
The tech sector is leading the way once again, adding 2.5% with chipmakers including NVIDIA (NASDAQ: NVDA) jumping 4.5% as demand for vehicles, gaming and smartphones is expected to be boosted by the economic recovery.
Social media heavyweights Twitter (NYSE: TWTR) and Facebook (NASDAQ: FB) added 4% on the rotation, while cloud software provider Oracle (NYSE: ORCL) ended down around 9% after delivering weaker than expected earnings. The company is attempting to pivot its business to fully embrace the cloud, selling software applications to users, but was only able to deliver 3% revenue growth in the December quarter.
Alibaba competitor JD.com proved its resilience reporting a 31% increase in quarterly revenue and now expects as much as 50% of all sales in China to be online. This comes at the same time that commentators are suggesting Alibaba (NYSE: BABA) CEO Jack Ma may have the largest fine issued by the Chinese Government in an effort to bring him in line with the Party.
