ASX Rises on Valentine’s Day, but Healthcare and Finance Giants Left Behind
The S&P/ASX 200 showed its sweet side this Valentine’s Day by hitting a record high during morning trading. However, major players like AMP and Cochlear faced gloomy results, with AMP cutting its dividend due to significant profit declines.
ASX Hits Record High Amid US Market Strength
The Australian share market got an early boost, with the S&P/ASX 200 index climbing to an all-time high of 8,598.7 points at 10.15am AEDT, up 0.7% before retreating slightly to a 0.41% gain by midday.
This spike followed a robust performance on Wall Street, where all major indices closed higher overnight. The S&P 500 and Dow Jones gained 1% and 0.8%, respectively, while the Nasdaq led the rally with a 1.5% increase.
The rally in US markets came as US President Donald Trump delayed the imposition of new tariffs until April, giving markets room to focus on growth and company earnings. Tech stocks like Nvidia were the stars of the show in the US, benefitting from AI stimulus and increased adoption of advanced technologies.
Moomoo Market Insights
Jessica Amir, a market strategist at Moomoo, explained that investor optimism was fuelled by strong corporate earnings reports in the US. She highlighted that companies across the S&P 500 delivered earnings growth averaging 11%, far surpassing expectations.
"Tech companies like Nvidia and AppLovin are enjoying immense growth, particularly due to AI integration driving their revenues. Nvidia, for instance, surged by 18% from its lows, while AppLovin's stock jumped 21% overnight after reporting a stunning 73% increase in advertising revenue," Amir explained.
Valentine's Day Losers – AMP and Cochlear
While the overall market appeared to be riding high, not every sector was feeling the love.
AMP Takes a Hit
AMP Limited (ASX:AMP) saw its stock plummet by over 14% to $1.50 following the release of its FY24 results. The wealth management and banking group announced a 43% decline in statutory profit to $150 million, largely due to restructuring costs and losses from selling its advice business.
Despite reporting a 15.1% increase in underlying profit to $236 million, the dividend payout was reduced. AMP declared a final dividend of just 1 cent per share, taking its full-year payout to 3 cents, down from 4.5 cents in FY23.
Cochlear Misses Expectations
Cochlear (ASX:COH), a leader in hearing-implant technology, also stumbled, with shares falling around 10% to a five-month low of $274. Although revenues from its implant sales rose by 13%, its services division experienced a setback with a 12% decline in growth.
The company attributed this slowdown to decreasing uptake of its Nucleus 8 Sound Processor, which initially launched strongly in FY23 but has notably tapered off since. Management has now adjusted expectations to the lower end of its FY25 profit guidance, forecasting NPAT of $410-430 million.
Sector Highlights
Of the 11 market sectors, nine traded in the green, bolstering the ASX’s sunny disposition on Valentine’s Day. Yet, healthcare and financials lagged behind due to weak performance by AMP, Cochlear, and Australia’s big four banks, all of which saw declines during morning trade.
Among the gainers, small-cap stocks shone brightly. Scorpion Minerals (ASX:SCN) led the charge, skyrocketing by 93% after unveiling plans to acquire a significant stake in Western Australia’s Jungar Flats gold project.
Here’s a look at the best-performing ASX small-cap stocks for February 14, 2025:
Top Gainers
- Scorpion Minerals (ASX:SCN) – Up 93% to $0.029
- Metgasco Ltd (ASX:MEL) – Up 67% to $0.005
- Greenhy2 Limited (ASX:H2G) – Up 50% to $0.003
However, not all small-caps shared the same success, with Corellares (ASX:CR9) and Energy Resources (ASX:ERA) both marking a steep drop of 33% during the session.
Balancing Optimism with Caution in a Shifting Market
The ASX hit new highs this Valentine’s Day, but it wasn’t all love in the air for investors. Companies like AMP and Cochlear had a tough day, leaving shareholders unimpressed with weaker-than-expected earnings and cuts to dividends. Their struggles stood out against the broader optimism across the market.
A boost from the US markets was a big driver behind the local surge, with excitement building over AI-powered growth and the delay of new US tariffs helping to lift confidence. Even so, it wasn’t smooth sailing across the board, and the mixed performance between different sectors is a reminder to stay cautious in what remains a fast-changing market.
Source
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