Australia’s stock market rallied on the busiest reporting day of the season, propelled by solid performances in the tech sector. The ASX200 finished up 12.8 points, reaching 8010.5, marking a 0.16% gain and extending the market’s winning streak to nine days.
Figure 1: Performance of ASX200 on August 21st, 2024
WiseTech Global Leads the Charge
Much of the market’s forward momentum stemmed from WiseTech Global’s impressive full-year results. The logistics giant saw its stock soar 18.36% to $111.71 after posting a 28% revenue increase. WiseTech Global, now Australia’s largest tech company, has strategically avoided the significant wage hikes seen elsewhere in the sector. An impressive 88% of its employees hold shared equity plans, aligning their interests with the company’s long-term success.
Founder and CEO Richard White, already among Australia’s top 15 wealthiest individuals, saw his fortune swell by $2.1 billion following the stock’s surge. White’s net worth now comfortably exceeds $10 billion, solidifying his status as one of the nation’s wealthiest entrepreneurs.
Figure 2: Performance of WiseTech Global (ASX: WTC) on August 21st, 2024.
Tech Sector Surges
The information technology sector outperformed all others, leading the market with a 5.3% gain. This surge highlights the growing influence of tech companies on the ASX and the broader Australian economy. WiseTech Global’s exceptional results strongly emphasize the immense potential for sustained growth in the sector, propelled by relentless innovation and strategic management.
Gold and Mining Stocks Shine
In the commodities market, gold prices have climbed more than 20% year to date. Overnight, the price of a gold bar surpassed US$1 million for the first time. This milestone boosted Australian gold producer Northern Star Resources, which gained 2.3%, closing at $14.90. Meanwhile, explorer Predictive Discovery saw its shares rise 9.8% to $0.28.
The mining sector also benefited from China’s efforts to support its struggling property sector. Mineral Resources saw a 5.1% increase, while Fortescue Metals Group gained 4.1%. Lynas Rare Earths experienced a notable jump, with shares rising 7.4% to $6.81.
Lottery Corporation Reports Strong Revenue Growth
On the consumer side, the Lottery Corporation reported a 13.8% increase in annual revenue, reaching $4 billion. The company now boasts a record 4.75 million customers playing its games, contributing to a 21% spike in annual net profit.
Lottery Corporation CEO Sue van der Merwe highlighted the broad participation in lottery games. “The lotteries model involves extensive participation by customers spending a relatively small amount of money to win a dream,” she said.
Despite these strong results, Lottery Corporation shares dropped 1.8% to $4.83. The decline follows news that the price of a Saturday Lotto ticket will rise. Van der Merwe noted the impact of big jackpots, including the $200 million Powerball and the $90 million Oz Lotto draw on Boxing Day. These events significantly boosted customer acquisition and reactivation.
Energy Sector Faces Challenges
The energy sector faced headwinds, with overnight benchmark Brent crude prices falling to near US$77 per barrel. This dip, coupled with weak financial results, weighed on Santos, which saw its shares drop 4.3% on Wednesday.
Santos CEO Kevin Gallagher acknowledged the challenges but emphasized the company’s resilience. “The disciplined low-cost operating model underpins our business,” he said. “We continue to manage our cost base to be resilient through all scenarios and price cycles.” Despite these efforts, Santos reported an 18% decline in half-yearly underlying profit, reflecting the energy sector’s broader pressures.
Outlook
The ASX’s ninth consecutive day of gains underscores the strength and resilience of Australia’s stock market, particularly in the technology sector. WiseTech Global’s stellar performance and the tech sector’s broader gains demonstrate the growing importance of innovation and strategic management in driving market growth.
However, challenges remain, particularly in the energy sector, where fluctuating oil prices and weaker financial results have created uncertainty. As companies like Santos navigate these challenges, their ability to manage costs and maintain operational efficiency will be crucial to their long-term success.
