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ASX Trading Wrap: Lithium stocks rebound, Webjet and Aristocrat gain on results, Wesfarmers and Woolies sink

Rene Anthony

Thursday, May 19, 2022

Thursday, May 19, 2022

Inflation is starting to become an even bigger talking point across the ASX as more companies begin to report the impact of soaring prices

Inflation is starting to become an even bigger talking point across the ASX as more companies begin to report the impact of soaring prices

Commodity stocks were the clear winners across the market this week, with gains coming from iron ore, battery metals and coal, to name a few segments running hot. There was also positive news out of the travel sector, but not all consumer-facing stocks fared well, with inflation starting to cause anxieties for large retailers.

Which shares excelled?

As China gradually eases some of its lockdown restrictions in Shanghai, commodity traders have turned somewhat upbeat, giving iron ore prices a much-needed shot in the arm after starting the week near a four-month low. Improving sentiment has been a catalyst for the likes of Grange Resources (ASX: GRR), Mineral Resources (ASX: MIN) and Champion Iron (ASX: CIA), each among this week best-performing mid-to-large-cap ASX stocks.With Australian coal prices setting a new record this week, circling $US450 per tonne, it has been a positive week for Stanmore Resources (ASX: SMR), Whitehaven Coal (ASX: WHC), New Hope (ASX: NHC) and Coronado Global Resources (ASX: CRN). Coal prices were given a boost as major coal importers like Japan wind-down their purchase agreements with Russian coal exporters in response to the war in Ukraine.Sticking with the commodities theme, lithium and battery metals stocks have enjoyed a bounce after a fortnight of heavy selling pressure. Gains were widespread across the sector, with some of the outperformers being Sayona Mining (ASX: SYA), Allkem (ASX: AKE), Jervois Global (ASX: JRV), Pilbara Minerals (ASX: PLS), Lynas Rare Earths (ASX: LYC), Syrah Resources (ASX: SYR) and Core Lithium (ASX: CXO).Shares in online travel agency and B2B hotel room inventory intermediary Webjet (ASX: WEB) have taken flight this week, buoyed by the company full-year results. Although the company unveiled $85 million in statutory losses across the full year, it has seen travel demand pick up, providing momentum for the business as the year progressed. Management indicated the company is now operating cash-flow positive, while both its online booking platform and hotel beds divisions were profitable across H2.After wrapping up its off-market buyback program, Qube Holdings (ASX: QUB) has had a bumper week. The diversified logistics and infrastructure company bought $400 million worth of shares at a discount of 5% from the market price, enabling  the company to buy back 8% of its capital. At the same time, Qube was also a beneficiary of positive sentiment at the start of the week that centred on speculation logistics peer Brambles (ASX: BXB) could be a private equity target.Having touched an 18-month low last week, Aristocrat Leisure (ASX: ALL) has rebounded strongly over recent trading sessions. The gambling machine operator and video game publisher unveiled a 23% improvement in terms of revenue versus a year ago, while net profit leapt more than 40% to reach $580 million. On the back of the news, management declared an interim dividend of 26 cents per share, while also surprising shareholders with a $500 million on-market buyback program.A few more of this week standouts are Mincor Resources (ASX: MCR), Imugene (ASX: IMU), Chalice Mining (ASX: CHN) and Calix (ASX: CXL).

ASX Trading Wrap: Lithium stocks rebound, Webjet and Aristocrat gain on results, Wesfarmers and Woolies sink

Which shares dragged on the market?

integrated building services group Johns Lyng (ASX: JLG) is one of this week leading underperformers, despite the fact the company had no news to announce to the market. Investors may have been nervous about rumours focusing on the solvency of Australia largest home builder, Metricon, which follows a tough time for the building sector after a number of construction firms have gone bust. Comments from the Master Builders Victoria also pointed to issues across the broader industry, naming supply and skills shortages, and inflation, as key challenges.These challenges were was also picked up in a trading update from building materials supplier Boral (ASX: BLD). The company announced its earnings have continued to be adversely impacted by extraordinary rainfall, as well as further increases in energy prices. Management anticipates an additional $45 million in costs for FY22. The negative news also flowed through to industry peer James Hardie (ASX: JHX), with its shares stumbling, despite the fact it reported a big lift in sales and profits just a couple days prior as it passed on higher costs.Elsewhere, scrap metal recycler Sims (ASX: SGM) announced that it has acquired a Brisbane port site for $88 million, but the news failed to excite investors . Describing the purchase, Sims' CEO said this transaction is consistent with the company strategy to grow in large coastal markets using top tier processing facilities and bulk export optionality. Nonetheless, shares in SGM were down around 8% week-to-date as of Friday morning.ASX-listed consumer-facing stocks took a big hit on Thursday, which followed an eventful session in the US where some of the most well-known retailers shed billions of dollars in value. After Walmart and Target both pointed to subdued profits and a weak outlook due to the effects of soaring inflation, ASX investors were also nervous, selling out of blue-chip stocks like Wesfarmers (ASX: WES) and Woolworths (ASX: WOW), as well as others like Metcash (ASX: MTS), JB Hi-Fi (ASX: JBH) and Super Retail Group (ASX: SUL).Also coming unstuck this week was Codan (ASX: CDA), likely due to tech volatility, as well as investment-oriented trio Magellan Financial Group (ASX: MFG), Hub24 (ASX: HUB) and Pendal Group (ASX: PDL), which are exposed to broader market volatility.

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

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