Jarden Brief: US energy stocks pull back as oil prices come off highs

Oil decreased 6.3 per cent to US$102.4 per barrel. Photo / AP

Keeping you up to date with the latest market moves, in association with Investment firm Jarden

New Zealand

The NZX 50 closed in the red yesterday, declining 0.1 per cent to 11,805.11 points.

Film industry company Vista Group International led the market down, falling 3.4 per cent. Scales Corporation was also booking losses, the agribusiness was down 3.0 per cent. Fast-food company Restaurant Brands rounded out the bottom movers with a 2.8 per cent drop.

Tourism Holdings performed strongly, gaining 5.3 per cent against the run of play. Despite this, the tourism company remains down 14.8 per cent year to date. Seafood producer Sanford and ANZ rallied yesterday, recording increases of 3.5 and 2.9 per cent respectively.

Australian fuel retailer Ampol announced the sale of its subsidiary, Gull, clearing the way for its planned acquisition of Z Energy. The acquisition is subject to Commerce Commission approval, with a final decision expected from the Commission on 16 March. Z Energy closed in the green, up 1.1 per cent.

The Government announced a temporary 25 cent per litre cut to the fuel excise duty for three months in response to rising petrol prices. The price per litre at the pump broke $3 in the past week – up more than 15 per cent since the start of the year.

New REINZ data shows a softening in property price growth, driven by reduced competition and buyer urgency along with more properties available on the market. The median price in February was $885,000, 13.5 per cent higher than February last year but lower than November's $925,000 high. Residential property sales fell 32.8 per cent year-on-year in February.

REINZ suggested that lending rule changes may have affected buyer attitudes in the market. It said a rise in stock could also be alleviating demand-side pressures, with 7441 more properties available for sale in February 2022 compared to the same month last year – a 47 per cent increase.

International
US

At the time of writing, the S&P 500 fell 0.6 per cent, and the NASDAQ decreased 1.9 per cent. The Dow Jones Industrial Average was up 0.2 per cent.

The financial sector performed the best, having increased 1.7 per cent. Other sectors that experienced gains included health and consumer staples, up 0.9 per cent each. Energy and consumer discretionary fell by 2.8 and 2.1 per cent respectively.

Biotechnology company Moderna increased 10.0 per cent, making it the best performer of the index at the time of writing. This follows the commencement of the first clinical trial for a human immunodeficiency virus (HIV) trimer mRNA vaccine.

Entertainment company Paramount was up 7.6 per cent. This may be seen as investors correcting for a significant fall in the share price following disappointing fourth-quarter results released last week.

EPAM systems gained 6.7 per cent, despite no recent news from the software developer.

The largest decliner, at the time of writing, was property developer Las Vegas Sands, down 11.8 per cent. This continues the decrease in the share price from late last week.

Rounding out the bottom three movers was natural gas company Coterra Energy, falling 9.2 per cent, and healthcare company Organon, with a decline of 8.6 per cent. Coterra's movements can likely be attributed to oil and gas prices coming off highs recorded over the last two weeks, with energy stock prices pulling back.

Rest of the world

Asian markets showed mixed performance. The Shanghai Composite decreased 2.6 per cent, Nikkei rose 0.6 per cent, and the Hang Seng fell 5.0 per cent.

European markets were in the green. The FTSE rose 0.6 per cent, the DAX was up 2.2 per cent and the CAC gained 1.8 per cent.

Russia's central bank has announced that its country's stock market will remain closed for a third week.

Commodities

Gold and silver fell 1.2 and 3.0 per cent, respectively.

At the time of writing, oil decreased 6.3 per cent to US$102.4 per barrel.

The cryptocurrency market was down 0.2 per cent, with Bitcoin having increased 0.1 per cent and Ethereum was down 0.3 per cent.

The US 10-year treasury rate rose 11 basis points to 2.115 per cent alongside a 10 basis point gain in the 30-year rate, to 2.461 per cent.

Australia

The ASX 200 gained 1.2 per cent yesterday to close at 7149.40, crossing above its 20-day moving average.

Sector performance was mostly positive, with 10 out of 11 sectors increasing on Monday. The leading three sectors were financial (+2.46 per cent), healthcare (+2.16 per cent) and consumer staples (+1.68 per cent). Materials held the title of bottom performer, down 0.34 per cent.

The day's biggest winner, increasing 11.0 per cent was agribusiness company Elders Limited. This gain followed a trading update revealing Elders Limited expect to report underlying earnings before interest and tax for the 2022 financial year, in the range of 20-30 per cent above 2021 levels. The company said this exceeded market expectations.

Investment manager Pendal Group and holding company Virgin Money were the other notable single stock outperformers yesterday, rising 6.6 and 6.2 per cent respectively.

On the contrary, Paladin Energy started the week in the red, down 7.5 per cent. Kopore Metals announced an agreement with Paladin Energy to acquire historical mining information for the Agadez project in Niger.

Chalice Mining (-4.4 per cent) and Nickel Mines (-4.2 per cent) rounded out Monday's underperformers.

Magellan Financial Group reported a steep decline in funds under management, which was followed by its share price decreasing to its lowest point in more than seven years. It finished the day trading at A$14.0, down 1.4 per cent.

Australian Prime Minister Scott Morrison signalled on Sunday that the upcoming federal budget should include relief for the rising cost of living. Morrison did not reveal if a fuel excise cut will be included in the budget.

• For more information on the latest market moves, get in touch with Jarden.

Disclaimer: The Jarden Brief is provided for general information purposes only. It reflects views and research available at the time of publication, using external sources, systems and other data and information we believe to be accurate, complete and reliable at the time of preparation. We make no representation or warranty as to the accuracy, correctness and completeness of that information, and will not be liable or responsible for any error or omission. The Jarden Brief is not to be relied upon as a basis for making any investment decision. Please seek specific investment advice before making any investment decision. Jarden Securities Limited is an NZX Firm. A financial advice disclosure statement is available free of charge at https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement/ Full disclaimer available at: https://www.jarden.co.nz/wealth-sales-and-research-disclaimer