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ASX hits new record high despite profit downgrades


Jan. 20, 2020

Monday's losers
Health insurer Nib tumbled 12.7 per cen t to $5.71 after warning that its financial year 2020 underlying operating profit could be as much as $30 million below previous guidance for underlying operating profit of at least $200 million.
Gentrack shares fell 14.3 per cent to $2.27 after the firm slashed guidance for its financial year, in a postscript to last week's statement telling shareholders to expect an update.
Online retailer Kogan.com sank as well, falling 22.2 per cent to $6.18 after telling shareholders that profit growth had slowed significantly since the September quarter.  Gross profit rose 10.8 per cent in the December half 2019.
Super Retail shares lost 1.8 per cent to $9.58 after telling investors that first-half sales were hurt by the bushfires that swept the east coast late last year and into the early days of 2020.
Morgan Stanley remains selective on Australian domestic cyclical companies "given a more cautious view on earnings, and particularly given the elevated trading multiples of some in the cohort," according to the strategists.
But while the domestic economy has some challenges, the outlook globally may be improving following December's trade deal between the US and China and the election of Brexit-supporting Boris Johnson as UK Prime Minister.
Monday's winners
Globally-focused healthcare firm CSL rose another 1.1 per cent to $303.45 on Monday.
Morgan Stanley remains keen on resource companies, pointing out that they are likely to perform well in an environment of improving global growth and Australian dollar weakness.
Iron ore miner Fortescue Metals Group touched a fresh record high on Monday, briefly hitting $11.85. It ended the session up 3.7 per cent at $11.83.
Fellow iron ore extractors Rio Tinto and BHP were also performing well, with Rio rallying 0.9 per cent to $106.19 and BHP up 1.6 per cent at $41.24.
Gold miners were higher as well, with Newcrest Mining up 0.8 per cent at $32.14 and Silver Lake Resources up 6.7 per cent at $1.50.
RBC analysts described Silver Lake's most recent quarterly results as "strong" while noting that gold production and costs at a group level were better than it had been expecting "owing to better grade driven performances at both Mount Monger and Deflector".
Oil hit a high of $US66 a barrel in early Asian trading with the renewed strength coming after Iraq stopped production at an oil field due to rising unrest in the country and the blocking of oil exports from Libya by forces loyal to General Khalifa Haftar.
In the energy sector, Beach Energy climbed 3.6 per cent to $2.87, Woodside rose 0.7 per cent to $35.82 and Santos advanced 0.9 per cent at $8.90.
But airline Qantas, which is leveraged to the oil price through fuel costs, fell 1.4 per cent to $7.05.
Windlab shares surged 32.6 per cent to 95¢ after the firm recommended that shareholder accept a $70 million takeover bid from Federation Asset Management.
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