ASX flat, CSL on course for biggest drop this year

Australian shares were largely steady at midday today, tracking Wall Street which struggled for direction before key US inflation.

The S&P/ASX 200 Index inched up 0.1 per cent or 9.3 points to 7823 by 12pm, having traded sideways in the narrow range all morning. It rose 0.5 per cent yesterday in the fifth day of gains.

Seven of the 11 sectors were trading in the green, led by real estate and miners. But gains were offset by a large slump in health stocks, down 2.7 per cent.

That’s largely due to a 4.1 per cent tumble in biotech giant CSL shares, despite the company forecasting double-digit earnings growth this year. CSL is on course for its biggest daily drop this year.

“The market will likely view the FY24 numbers as slightly disappointing given the higher than expected operating expenses or expenditure,” said Craig Wong-Pan, an analyst at RBC Capital Markets.

“While the market was likely anticipating conservative FY25 guidance, we suspect the NPATA [net profit after tax and amortisation] guidance will still be viewed as weaker than expected.”

Wealth giant Challenger leapt 7.2 per cent after lifting its dividend by 10 per cent to 26.5¢ fully franked.

Online recruitment platform Seek was the biggest laggard, down 8 per cent after lower job ads across the region hit its bottom line.

A jump in oil prices overnight boosted Woodside and Santos with the latter up 0.9 per cent. Beach Energy climbed 3.6 per cent. Brent prices jumped more than 3 per cent yesterday, above $US80 a barrel, on expectations that a wider Middle Eastern conflict will tighten global crude oil supplies. Brent was trading at $US81.86 at midday.

Elsewhere on the ASX, the big four banks rose led by ANZ, up 1.6 per cent. Index-heavy Rio Tinto climbed 1.2 per cent, BHP added 0.6 percent and Fortescue gained 0.4 per cent.

The Australian dollar edged up to US65.90¢. Australia’s wage growth rose 0.8 per cent in the June quarter, from the March period, under forecasts of a 0.9 per cent gain. The annual pace rose 4.1 per cent, above expectations of 4 per cent.

The result suggests the peak of pay growth is behind. The Reserve Bank is counting on a cooling in pay packets to bring inflation back to its mid-point target of 2.5 per cent.

Stocks on the move

Building products group James Hardie fell 1.7 per cent even as it posted a 1 per cent lift in first-quarter adjusted earnings.

Online retailer Temple & Webster exploded almost 27 per cent higher after posting bumper results.