Key takeaways:

• Insurers and iron ore stocks lifted the market this week, while the healthcare sector went in the opposite direction

A rate hike reprieve from the Federal Reserve was the catalyst for a streak of positive trading sessions, with financials and materials leading the way.

Which shares excelled?

Fleet leasing and salary packaging firm McMillan Shakespeare (ASX: MMS) was one of the major movers that helped the ASX climb higher. Much of its share price increase came on Thursday when news broke that ASX-listed Eagers Automotive, the leading automotive retail group in Australia and New Zealand, acquired a 5.7% stake in the business.

The move attracted widespread intrigue given McMillan Shakespeare typically sources vehicles based on what its customers require, but that hasn't stamped out speculation of a potential transaction involving the two parties.

Iron ore titan Fortescue Metals Group (ASX: FMG) delivered its strongest trading session for the year as the company gained ground amid developments out of China. The economic recovery in the world second largest economy has been patchy to date, but Beijing officials are now stepping up their plans to kick-start growth. 

China central bank cut a number of key interest rates this week, as the government responds to downbeat data showing slowing economic growth last month. One data point that showed positive signs for miners like FMG was China iron ore imports, which rose 6.3% month-over-month, and 4% year-over-year to 96.2 million tonnes.

Setting a fresh 52-week high, Insurance Australia Group (ASX: IAG) was helped by its investor day update. Management informed the market that the company is on track to achieve its guidance of around 10% growth in gross written premiums in FY23. 

The insurance firm is also approaching reported insurance margins of around 10%, thanks in no small part to margin improvements across its Australian operations. Amid the positive backdrop, IAG hiked its medium-term return on equity target one percentage point to a range of 13% to 14%.

AUB Group (ASX: AUB) also features among the top performers over recent days. The company is a group of retail and wholesale insurance brokers and underwriting agencies operating across hundreds of locations throughout the world. On Thursday the business indicated that it successfully completed its share purchase plan thanks to strong support from shareholders. In total, the business received $37 million of valid applications, exceeding the raise target of $15 million.The rest of the winners this week include names like Smartgroup Corporation (ASX: SIQ), Sigma Healthcare (ASX: SIG), Leo Lithium (ASX: LLL), Costa Group Holdings (ASX: CGC), and Credit Corp (ASX: CCP).

Which shares dragged on the market?

Global biotech giant CSL (ASX: CSL) was one of the biggest drags on the market this week, and also prompted a sell-off across the broader healthcare sector. The company surprised investors with its latest trading update, slashing its profit guidance for FY23. 

On the back of currency movements, the healthcare giant now expects foreign currency headwinds to amount to between US$230 million to US$250 million. That guidance is significantly above the US$175 million flagged by the company when it reported its half-year results back in February.

Looking even further ahead, the business advised the market that it anticipates underlying net profit after tax (NPATA) for FY24 to grow in the vicinity of 13% to 18%, which would correspond with guidance of between US$2.9 billion to US$3 billion in constant currency terms. This level of growth is well below what most analysts were forecasting, with some previously tipping profit to reach US$3.5 billion.

Another high-profile name coming unstuck on the back of a trading update was Domino Pizza Enterprises (ASX: DMP). Australia largest pizza chain business advised the market that same store sales were up 0.2% in the second half of the year, and up 2% in the fourth quarter. However, store openings for FY24 are expected to be below the company medium-term guidance of 8% to 10%.

Meanwhile, the business flagged that it is going to make operational changes to drive improvements. It plans to exit the Danish market by the end of FY23, but more tellingly, the business is set to slash its company-owned store network by around 15% to 20%. This follows concerns about the profitability of these stores. 

A selection of Domino other stores will be handed over to franchisees as part of a turnaround partnership. Further changes are planned to deliver savings of up to $59 million per annum, including the closure of non-core operations.

Fresh from raising $943 million as part of a placement to Indonesia PT United Tractors, the share price of Nickel Industries (ASX: NIC) came back down to earth this week. As part of the capital raise, the two parties executed a collaboration agreement for potential future Indonesian nickel mining and processing.

Although its newest substantial shareholder took up a 19.99% stake in the business at a premium of 27.2%, investors would appear to still have some concerns about nickel supply, with the commodity trading near a 10-month low. Indonesia has significantly ramped up its nickel production in recent times, such that an industry surplus was recorded in 2022, and is expected again in 2023.

With its own setbacks over recent trading sessions were Silex Systems (ASX: SLX), Lynas Rare Earths (ASX: LYC), and Incitec Pivot (ASX: IPL), which round out the week underperformers.

We'll be back next week with another Weekly ASX Trading Wrap Up - until then, have a great week!

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