ASX in the red as reporting season rolls on with results from Wesfarmers, Qantas, Santos and Webjet

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The Australian share market has opened lower, after US stocks retreated from record highs overnight.

By 10:25am AEST, the ASX 200 had lost 0.7 per cent to 6,122 points, with energy the worst-performing sector in early trade.

Santos shares were down 4.1 per cent to $5.64, after reporting a half-year loss of $US289 million.

The company’s underlying profit nearly halved, hurt by weaker oil and gas prices due to weak demand during coronavirus lockdowns.

“Santos remains confident that when prices and demand recover, our projects will be better placed than those in our competitor countries to leverage the opportunities that will inevitably re-emerge,” Santos boss Kevin Gallagher said.

Wesfarmers shares were 0.3 per cent higher at $49.02, after reporting a 69 per cent fall in net profit for the 2020 financial year, to $1.7 billion.

The previous year’s $5.5 billion net profit was boosted by the proceeds of the demerger of Coles.

A $525 million impairment charge, relating to slashing the value of the Target brand name, weighed on the conglomerate’s bottom line, as did restructuring costs for the overhaul of its department store division, which will include the closure of dozens of Target stores and the conversion of others to Kmart stores.

The company said Bunnings and Officeworks experienced increased demand as coronavirus restrictions saw people work from home and take up projects around the house.

Bunnings sales lifted nearly 14 per cent, while Officeworks recorded a 20.4 per cent increase, and Kmart’s sales rose by 5.4 per cent.

Online sales rose 60 per cent over the year to $1.5 billion, excluding online marketplace Catch, which it acquired last year.

Shareholders will receive a final dividend of 77 cents per share, and an 18-cent special dividend from the proceeds of selling a 10 per cent stake in Coles.

Pandemic leads Qantas, Webjet to losses

Meanwhile, Qantas has recorded a $2 billion loss, with the coronavirus pandemic slashing its full-year revenue by 21 per cent as most of its fleet remains grounded.

The airline’s shares rose 0.8 per cent to $3.80.

Webjet was the worst performer on the benchmark index in early trade, with shares down 8.2 per cent.

After the close of trade yesterday, the online travel agency reported a loss of $143 million, compared to a $60 million profit the previous year.

It did not declare a final dividend and further delayed the payment of its interim dividend until next April.

The best-performing stock was IDP Education, with shares up 27 per cent after reporting a 2 per cent lift in full-year net profit.

The Australian dollar was fairly steady, buying around 71.8 US cents.

US stocks pull back from record highs

Overnight, S&P 500 touched a new high for the second-straight session, while the Nasdaq hit a new record for the third day in a row.

However, the major US indices closed lower in the end, with the Dow Jones Industrial Average losing 0.3 per cent, following the release of the Federal Reserve’s meeting minutes for July.

The US central bank detailed concerns about the economic recovery from the coronavirus downturn.

The minutes showed policymakers believed the swift rebound in employment in May and June had likely slowed and a “broad and sustained” reopening of business would be required to spur an additional recovery in the jobs market.

However, the Federal Reserve ruled out measures such as yield-curve control, which involves buying longer-term government bonds to keep interest rates from rising above its target, for now.

“The Fed was cautious in the minutes and has been over the last month,” Jones Trading chief market strategist Mike O’Rourke told Reuters.

“I think the fact that the Fed was not too warm on the yield-curve control and some of the extreme measures investors may have liked to see was a concern.”

Apple became the first publicly listed US company to top $US2 trillion ($2.76 trillion). Apple shares closed off the highs of the session, at $US462.83.

By business reporter Stephanie Chalmers, wires (Original ABC Article)

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