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Market wraps 30th November 2021

Morning Bell - Paulina Peters

The ASX200 closed in the red yesterday, down 0.5%, in what was a rollercoaster session for the benchmark index, driven by investor fears about the new omicron COVID-19 variant.

Only two of the eleven sectors were higher, materials and information technology. While the real estate and energy sectors came under pressure, down 1.4% each.

The biggest gainers included HUB24 (ASX:HUB), Bapcor (ASX:BAP) and Domino’s Pizza (ASX:DMP). Mineral Resources (ASX:MIN) lifted 3.4% after the company announced it had entered into a port and rail agreement. And healthcare company, Healius (ASX:HLS) benefited from elevated demand for COVID-19 testing services. Travel stocks suffered as Aussie states initiated tougher quarantine rules on arrivals from nine African countries. The largest falls however, were for shopping centre owners, Unibail-Rodamco-Westfield (ASX:URW) and Vicinity Centres (ASX:VCX).

In the US, all three benchmarks closed higher and recovered from Friday’s sell-off. This follows President Joe Biden stating that that economic lockdowns in response to the omicron COVID-19 variant are currently off the table. Mega-cap tech stocks were amongst the biggest winners.

Today, the Aussie share market is set to rise amid a broad rebound in equities and commodities. The futures are suggesting a lift of 0.6%.

What to watch today:

  • Economic data out today includes building permits and private sector credit.
  • Looking at commodities, following its worse day in 2021, oil prices bounced back on Monday. The WTI gained 2.6% to settle at US$69.95 a barrel. The gold price eased, as the dollar firmed, and the spot iron ore price traded down 4% to US$96.50 a tonne.
  • KFC owner, Collins Foods (ASX:CKF), is set to release its half year results. While no guidance has been given, the business plans to build 9 to 12 KFC restaurants in Australia this financial year. Macquarie is bullish on the stock, currently holding an outperform rating and $14.75 price target.
  • Companies holding their AGMs today include Starpharma (ASX:SPL), Orocobre (ASX:ORE) and Omni Bridgeway (ASX:OBL).
  • Spark Infrastructure Group (ASX:SKI) is set to go ex-dividend today.

Trading Ideas:

  • Bell Potter have maintained their BUY rating on technology hardware and equipment company, EROAD (ASX:ERD) with a decreased price target of $5.95 (previously $6.05). This follows EROAD’s mixed first half 2022 result, which was impacted by slightly higher operating and R&D costs, while group revenue was up 4.8% year-on-year. Separately, EROAD is in the early stages of expanding its platform offering and enterprise sales initiatives in North America and Australia. EROAD closed flat yesterday at $4.70, which implies 26.6% share price growth in a year.
  • Bullish charting signals have been identified in Bannerman Energy (ASX:BMN), Redbubble (ASX:RBL) and Sparc Technologies (ASX:SPN), and that’s according to Trading Central.