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ASX closes 0.9% lower, materials and energy drag

Daily Market Update

ASX hit, defensive rotation begins, Oil Search loses MD, Telstra takes on China 

The ASX 200 (ASX: XJO) strengthened throughout the day, ultimately finishing 0.8% lower despite being as low as 1.1% during the morning session.

The mining and energy sectors were weakest on concerns of a global outbreak of the Delta variant, with both falling by over 2%.

BHP Group Ltd (ASX: BHP) was one of the worst-hit, down 2.6%, whilst PNG oil explorer Oil Search Ltd (ASX: OSH) dropped over 5% after losing its Managing Director Dr. Keiran Wulff.

Reports have suggested the departure was due to health issues, but management has noted a series of complaints against the leader.

CSL Limited (ASX: CSL) was back in favour today as investors flocked to ‘quality’, sending shares 1.8% higher ahead of earnings season.

Following speculation over the weekend, Telstra Corporation Ltd (ASX: TLS) confirmed its interest in acquiring Digicel Pacific, the biggest telecommunications provider in the Pacific Islands.

Management noted any deal would require the support of the Federal Government to manage geopolitical and other risks, something likely to be well supported given China’s intense interest in the group which has over US$235 million earnings.

Altium tanks, Cooper’s record quarter, Humm profit doubles, ANZ’s buyback

ANZ Banking Group Ltd (ASX: ANZ) announced it would be buying back $1.5 billion of its own stock this morning, with shares outperforming on a down day.

The buyback will be on-market, akin to the approach taken by many US companies who view their assets as being undervalued.

Altium Limited (ASX: ALU) pushed lower after rumours spread that the takeover from Autodesk may not come to fruition, management had little to add which sent shares down 3.8%.

Victorian gas play Cooper Energy Ltd (ASX: COE) fell 4% despite delivering a record year for production, sales, and revenue.

The company confirmed that production from its difficult Orbost plant had jumped 69% in the financial year, with sales almost doubling growing 94% to 3 million barrels. The result was a 69% increase in revenue to $131 million.

BNPL convert Humm Group Ltd (ASX: HUM) reported a doubling of cash profit to $68 million for the year. 

Previously known as FlexiGroup, the group processed $304 million of transactions in the June quarter, 69% growth, sending shares over 8% higher.

US markets suffer, ‘peak everything’, IBM beats expectations

US markets are set to push global equities down this week with the Dow Jones falling 700 points or 2.1% in Monday’s session, pushed lower by concerns that the Delta variant outbreak will put a secondary brake on the economy.

Analysts are also wary of ‘peak everything’, a concept that suggests economic growth, inflation, and earnings have already peaked.

The Nasdaq and S&P 500 fared slightly better with quality big tech and healthcare back in fashion, down 1.6% and 1.1%, respectively.

The likes of Moderna Inc (NASDAQ: MRNA), NVIDIA Corporation (NYSE: NVDA), and Docusign Inc (NYSE: DOCU), all stay-at-home winners topped the market, adding 9%, 3%, and 2% to lead the market.

The oil price also suffered its biggest daily percentage drop in months, falling over 7% as OPEC+ came to terms on a deal to increase supply, which is set to push the likes of Woodside Petroleum Limited (ASX: WPL) lower today.

Finally, the US and EU governments singled out China as the source of recent cyber-attacks on Microsoft Corporation (NYSE: MSFT), increasing geopolitical risk with the country.

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