S&P/ASX 200 morning report – what ASX investors need to know

Australia’s S&P/ASX 200 (XJO) and All Ordinaries (XAO) indices are tipped to jump at the open this morning. Infigen (ASX: IFN) and Qantas (ASX: QAN) shares are again the focal point.

What you missed

The ASX 200 followed a negative lead from Wall Street, falling 1.5%, albeit on lower volumes amid the beginning of school holidays.

The local market traded as low as 2.2% throughout the day, with chronic underperformers in the property sector like Unibail-Rodamco-Westfield seeing significant tax-loss selling as 30 June nears. With a single day of trade remaining, the market is off 13% for the financial year, the worst since 2009.

Fisher & Paykel: the ASX’s next top medical stock?

Fisher & Paykel Healthcare or FPH has continued to stake a claim as ‘the new CSL’, rallying 6.8% on Monday after reporting a 37% improvement in profits. FPH manufacturers ventilators and benefitted from a 300% increase in sales to hospitals resulting in an 18% jump in revenue for the year ended 31 March. The result was a 15% increase in the dividend, sending the 2020 gains to 60%.

Just as Qantas shares fell below its capital raising price, off 5%, Regional Express shares added 17% after confirming its intention to enter the Melbourne-Sydney-Brisbane route. As highlighted previously, there is simply too much uncertainty in the travel sector to warrant an investment, and I’m surprised the Qantas raising price started with a 3 not a 2.

Finally, Lotto operator Jumbo Interactive stock fell 13.2% despite announcing a 10-year deal with Tabcorp in Queensland.

Green stocks taking over

The renewable energy sector has become more interesting by the day, with UAC Energy and Iberdrola in a bidding war for Infigen Energy, the takeover offer now hitting $0.89 cents per share. The wind farm operator joins the now Federation and Minderoo owned Windlab in the hottest sector of the moment.

Whilst the transition to a lower-carbon economy has been heavily impacted during the COVID-19 crisis, trillions of dollars in stimulus, particularly across Europe and Asia, has been specifically targeted at the sector as Government’s embark on ‘Green New Deals’ and seek to exit the crisis stronger than before.

We enter the final day of trading for the financial year in a very different place to where it started, with central banks once again determining the outlook for investors. With some complacency creeping into markets, it’s my view that investors should be considered substantial changes to their investment strategy as we enter unchartered territory.

Finally, in today’s Editor’s Selection on Best ETFs, Jaz Harrison takes a look at the BetaShares Ex-20 Portfolio Diversifier ETF (ASX: EX20) and asks if it is the best way to invest in ASX shares.

This report was written by Drew Meredith, Financial Adviser and Director of Wattle Partners. To get in contact with Drew, click here to visit the Wattle Partners website.

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From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

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