A promising February on the Australian market ran into a roadblock on Friday, with the benchmark S&P/ASX 200 (ASX: XJO) surrendering 71.2 points on the day, or 1.0%, to 7217.3 points. While that was the biggest loss in more than two weeks, the index was still up 1.4% for the week, in its second straight rising week.
Ten of 11 sector gauges eased lower on Friday, led by the tech stocks. Afterpay’s purchaser Block (the CHESS Depositary Interests, or CDIs, that is, with which it paid APT shareholders) slipped 6.7% to $147.45, AI data services company Appen Ltd (ASX: APX) lost 6.3% to $8.42, and small-business accounting software leader Xero Limited (ASX: XRO) ended 4.5% lower.
Materials held up its end, with a 0.3% rise supported by higher Chinese steel and iron ore futures prices. Rio Tinto Limited (ASX: RIO) rose by 2.9% to $122.36, Fortescue Metals Group Limited (ASX: FMG) gained 2.5% to $22.99, and BHP Group Ltd (ASX: BHP) put on 1.2% to $48.86.
The broader All Ordinaries (ASX: XAO) lost 79.7 points, or just over 1%, to 7,515.8, as the Australian market also felt the influence of US inflation concerns and geopolitical worries.
Funds leach at Magellan
Magellan Financial Group Ltd (ASX: MFG) lost a further 94 cents, or almost 5%, to $18.11, as the company reported a funds under management update that showed that Magellan’s funds continue to leach money.
Investors – both institutional and retail – are voting with their feet over concerns at Magellan’s investment performance, and as ratings agencies review their recommendations, the market appears to believe the fund outflows will increase.
According to the release, at the close of the US market on 9 February, Magellan’s funds under management (FUM) stood at approximately $87.1 billion, down almost 9% in 2022 so far.
Chris Mackay, Magellan’s co-founder and interim lead global strategies portfolio manager, told investors the company will do “whatever it takes” to turn its underperformance streak around and manage the absence of co-founder Hamish Douglass.
IAG upgrades
Insurance Australia Group Ltd (ASX: IAG) provided a highlight, adding 4.2% to $4.74 after upgrading its guidance for the key number gross written premium (the total amount of insurance premiums that the company sells to customers) would rise in the “mid-single-digits” for the year, after previously telling the market to expect “low single-digit” growth.
Baby Bunting grows
Baby goods retailer Baby Bunting Group Ltd (ASX: BBN) had good news for the market, with net profit surging by 12.2% in the first half of the 2021-22 financial year, on the back of total sales rising by 10%, to $239.1 million.
Same-store sales growth, including sales from online, was a more sedate 6.8%.
Perversely, Baby Bunting shares eased 16 cents, or almost 3%, to $5.27, to be down 5% year-to-date.
ASX 200 today
Looking ahead, the ASX 200 is set to open lower this morning, following a negative lead from US markets. To find out more, check out my US stock market report.