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ASX 200 set to rise – TLT, APT & FLT shares in focus

The ASX 200 (ASX: XJO) is expected to rise when the market opens on Tuesday according to the latest SPI futures. Here’s what’s making headlines.

ASX delivers small gain, Afterpay share price continues to tumble

The S&P/ASX 200 finished slightly higher, adding 0.1% to commence the week. The IT sector continues to feel a great deal of selling pressure, with Afterpay Ltd (ASX: APT) falling another 4.5% as investors continue to pivot towards more sustainable, undervalued sources of returns. The Afterpay share price is now nearly 30% off its recent highs.

Afterpay share price chart

Source: Rask Media 1-year APT share price chart

Financials led the way, with the major banks gaining modestly, including the National Australia Bank Ltd (ASX: NAB) up 0.2%, on the back of the RBA Governor’s latest speech.

Speaking in Melbourne yesterday, Governor Lowe surprised delegates by suggesting the economic recovery has been quicker and stronger than expected but flagged that ‘this does not hide the fact that we still have a long way to go’. It would seem the markets are starting to get the message being put to them by central banks.

Healthcare and energy were the other winners, the former up 1.0% behind CSL Limited (ASX: CSL) and Ramsay Health Care Limited (ASX: RHC) which added 3.2% as lockdowns in Europe continue to be removed.

Broker Morgan Stanley has flagged caution towards the recent recovery in travel stocks, pointing out that enthusiasm for vaccines and the opening of domestic borders may have sent shares in Flight Centre Travel Group Ltd (ASX: FLT) up too fast too soon.

Tilt Renewables auction complete, Fortescue to go green

The biggest news of the day was the acquisition of the massive Tilt Renewables wind farm and associated projects by a consortium of Australian investing. Under the guide of PowAR, shortened from Powering Australian Renewables, a group of investors including AGL Energy Limited (ASX: AGL), the Future Fund and the Queensland Investment Corporation (QIC) have won the auction for the 836MW hours of wind projects owned by NZ-based Tilt Renewables Ltd (ASX: TLT).

The deal values the portfolio of assets at A$2.7 billion, with the NZ projects to be obtained by Mercury NZ Ltd (ASX: MCY). The auction comes just a few months after AustralianSuper lobbed an unexpected bid for ASX-listed Infratil Ltd (ASX: IFT), which owns 65.5% of the company.

The purchase is a sign of things to come in the clean energy sector, with investors increasingly attracted to the pipeline of potential projects, not just the operational assets. Shares in NZ government-owned Meridian Energy Ltd (ASX: MEZ) jumped 3.8% on the news.

Sticking with energy, Andrew Forrest has flagged his intention to turn Fortescue Metals Group Limited (ASX: FMG) into a green powerhouse, going carbon neutral before 2030 via a combination of green hydrogen, ammonium and electricity projects. The Fortescue share price fell 4.2% on the news.

US tech recovers, AstraZeneca vaccine concerns in Europe

US markets recovered overnight, powered ahead by the big tech names including Apple (NASDAQ: AAPL) and Tesla (NASDAQ: TSLA) as bond rates concerns faded.

The Nasdaq finished 1.0% higher, outperforming the Dow Jones and S&P 500, up 0.5% and 0.76% respectively, with utilities and real estate benefitting as investors seek new income sources.

Chinese economic data was released showing factory input had bounced 35.1% on 2020 levels and retail sales a further 33.8%. Whilst the comparables are favourable, it’s a positive sign that the economy continues to recover strongly.

Chinese tech giant Tencent (HKG: 0700) looks to be the latest company to bear the brunt of the regulator, shares falling 3.5% overnight as the Chinese Government looks to clamp down on their aggressive acquisitions and massive power in digital payments. According to Bloomberg, the fall now represents the value of the entire payments business, or close to $100 billion.

On the other hand, phone maker Xiaomi (HKG: 1820) has been a key beneficiary of the Biden administration, adding 7.0%, as the Trump White House’s block on exports was reversed.

Finally, the rollout of the AstraZeneca (LON: AZN) has been suspended in Germany, France and Italy, despite receiving approval from the US.

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Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Disclosure: At the time of publishing, Drew owns shares in CSL.

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Wattle Partners is a financial advice firm, servicing clients around Australia, specialising in retirement planning (pre and post retirement). 

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