ASX flat on jobs data; Flight Centre, Zip advance

By Emma Koehn

The local market pared back early gains to sit flat in early afternoon trade as positive jobs data raised the prospect of the Reserve Bank being forced to hike rates once more.

The ASX200 was ahead by just three points or 0.04 per cent to 7,326.7 just before 1:00pm, having opened 0.7 per cent stronger.

Wall Street has continued to climb.
Wall Street has continued to climb. Credit: Reuters

Labour force data released on Thursday morning showed employment beat expectations in June, with net employment up by 32,600, ahead of market forecasts of an increase of 15,000 jobs.

The figures sent the Australian dollar surging, with the currency sitting up 0.8 per cent to 68.2 cents in the early afternoon.

The financials sector trimmed early gains to sit flat at 1:00pm, however, while the standout sector was tech stocks, up by 0.6 per cent.

Bottle shop Dan Murphy’s and ALH Hotels operator Endeavour Group was 2.4 per cent stronger to $6.03 after the company said it would be moving early to implement regulatory changes proposed by the Victorian government this week such as shorter operating hours for its gaming areas and a $100 cash load limit for pokies.

Strong trading updates from Flight Centre and buy now, pay later operator Zip Co were also well received. Flight Centre shares were ahead by more than 4 per cent to $21.65 after the group upped its earnings guidance, while Zip was 9.2 per cent stronger to 47.5 cents after the company revealed its quarterly revenues had lifted despite a decline in active customers.

Coles Group shares sat 0.3 per cent lower, with Australia’s consumer watchdog raising concerns about its proposed acquisition of two milk processing facilities from Canadian-owned Saputo Dairy Australia for $105 million. The ACCC is concerned that the acquisition would strengthen Coles’ position in the dairy supply chain and see Saputo exit the NSW milk market, which would reduce competition and cut prices farmers receive for raw milk.


Shares in pathology operator Australian Clinical Labs (ACL) declined by 1.9 per cent while its takeover target Healius gained 0.9 per cent after the ACCC also raised concerns about the competition implications of ACL buying Healius.

Overnight, S&P 500 rose 0.2 per cent for its seventh gain over the last eight days. It’s now up nearly 19 per cent for the year so far and at its highest level in more than 15 months. The Dow Jones gained 0.3 per cent and the Nasdaq composite edged up by less than 0.1 per cent.

Insurance company Elevance Health helped lead the US market, climbing 4.4 per cent after it reported stronger profit and revenue for the Northern Hemisphere spring than analysts had expected and raised its profit forecast for the full year.

Stocks also broadly got a boost from easing pressure from the bond market. Yields there were holding steady or falling after a report showed UK inflation cooled by more than expected. It eased to 7.9 per cent in June, a 15-month low.

The UK data follows encouraging US reports that have raised hope inflation is moderating enough to convince the Federal Reserve to halt its hikes to interest rates soon. That could help the world’s largest economy avoid a long-predicted recession.

The S&P 500 has already soared 18.9 per cent so far this year as the economy has managed to power through high interest rates, mostly thanks to a remarkably solid job market. Early in the year, much of the market’s gains came from just a small handful of Big Tech stocks, but the gains have broadened out a bit recently as the economy has held up and inflation has cooled more.

In the commodities market, wheat prices surged after Russia launched drone and missile attacks on critical port infrastructure in Ukraine, destroying 60,000 tonnes of grain. The price of soft red winter wheat, traded in Chicago and used for cookies and specialty products, rose 8.5 per cent.

The attacks come days after Russia pulled out of the Black Sea Grain Initiative, which allowed exports from Ukraine to reach many countries facing the threat of hunger.

– with AP

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