Markets Live, Thursday 26 August, 2021

The Australian sharemarket eroded two days of progress on Thursday as the mining, banking, and health blue-chips weighed and earnings sentiment was again dominated by uncertainty. The benchmark S&P/ASX 200 lost 0.5 per cent to halt a three-day rally, closing at 7491.2 to remain narrowly in front for the week. […]

The Australian sharemarket eroded two days of progress on Thursday as the mining, banking, and health blue-chips weighed and earnings sentiment was again dominated by uncertainty.

The benchmark S&P/ASX 200 lost 0.5 per cent to halt a three-day rally, closing at 7491.2 to remain narrowly in front for the week.

Qantas and Woolworths were the headline acts in a final high-traffic day of corporate earnings, with both companies finishing the day higher alongside Blackmores, Whitehaven Coal, Flight Centre, and Growthpoint.

The resource-heavy ASX looks vulnerable to shifting investor sentiment.

The resource-heavy ASX looks vulnerable to shifting investor sentiment.Credit:

However, shareholders were once again forced to grapple with particular pressure points that have become the hallmark of this profit period.

For the past month reporting companies have generally presented healthy balance sheets and heftier shareholder returns, although the lack of concrete guidance and looming shipping and logistics issues have drawn a mixed reaction from investors.

This was certainly the case for Woolworths, which lifted its full-year profit and revenue, boosted its dividend and announced a $2 billion share buyback, while also warning that it was anxious about getting stock in store for Christmas.

TMS Capital portfolio manager Ben Clark said across the board it had been a relatively strong results season, though the number of companies neglecting to offer guidance was a concern for some.

“It’s a pretty positive mood, but there are two or three issues that have emerged that everyone is dealing with, mostly to do with lockdowns global supply chain issues,” Mr Clark said.

“The cost of moving stuff around have gone through the roof and managing inventories seem to be getting worse.

Mr Clark also noted that the market’s reaction was not necessarily an indication of the health of a company’s balance sheet, with expectations key to share price movements.

“I’ve heard someone say that it shouldn’t be called earnings season, it should be called expectation season,” Mr Clark said.

“It’s not about how good or bad the business did, but how good or bad it did compared to what the market was expecting.

“Generally I think the numbers have been quite strong, it’s the forward-looking stuff that is a bit patchy.“

Wall Street’s lead was cautious on Thursday as investors look to the upcoming Jackson Hole Symposium, where the US Fed is expected to offer guidance on the future of stimulus support and interest rates.

On local shores, shareholders weren’t impressed with the earnings figures released by Endeavour, Qube, a2 Milk, Eagers Automotive, Link Admin Holdings, Cromwell, AUB, Appen or Costa Group.

There were also losses for BHP, Rio Tinto, Fortescue Metals and a slew of gold miners, while NAB, Westpac, ANZ and Macquarie Group, CSL and Afterpay also fell.

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