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ASX recovers amid ‘tremendous’ uncertainty, Qantas to ax flights over high fuel prices


Australian shares have recovered from their early losses, as copper prices dropped to a 16-month low and commodity prices continued to slump over worries about a global economic slowdown.

The ASX 200 fell slightly when trading began on Friday morning. However, it had risen by 0.3 per cent, to 6,546 points, by 11:45am AEST.

Materials and energy stocks were the biggest drags on the market, including including South32 (-3.5pc), Ampol (-3.4pc), Santos (-2pc), Newcrest Mining (-2.1pc), Rio Tinto (-1.9pc), BHP (-1.4pc).

On the flip side, the local technology sector rebounded, led by Zip Co (+9pc), Life360 (+12pc), Appen (+5.7pc), and Tyro Payments (+5.1pc).


The Australian dollar rose slightly to 69 US cents on Friday morning. But that was after a 0.5 per cent slide overnight.

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As fixed mortgages end and interest rates rise, many risk losing their homes(Nassim Khadem)

Qantas cuts domestic flights

Qantas will reduce its number of domestic flights through March 2023, as the company grapples with higher fuel prices and staffing issues at airports that are affecting much of the industry worldwide.

The airline said it remained on track to swing to a profit in the next financial year starting July 1, and had reduced its debt to below pre-pandemic levels.

Qantas has been able to recover the cost of high fuel prices in the international market through higher fares, chief executive Alan Joyce said this week, but has been unable to do so in the domestic market.

The latest round of capacity cuts for July and beyond will take domestic capacity to 99 per cent of pre-pandemic levels in the first quarter and 106 per cent in the second quarter, Qantas said.

Most of the capacity will be cut from high-frequency routes, the airline said.

It comes as the airline’s on-time performance levels have been falling and Australian airports have been struggling to secure enough workers after mass lay-offs during the pandemic.

A man addresses the media
Jetstar CEO Gareth Evans will step down in December, after 23 years at Qantas Group. (AAP Image: James Gourley)

Qantas seeking 2pc pay rise, Jetstar boss resigns

Qantas said it planned to give $5,000 bonuses to up to 19,000 staff when they signed fresh union contracts after a two-year wage freeze during the pandemic.

The company is trying to negotiate a new enterprise agreement with staff that allows for a 2 per cent pay increase each year — well below the current rate of headline inflation (5.1 per cent).

On Friday, Qantas also announced that Gareth Evans, the head of its low-cost airline, Jetstar, would step down from his role in December.

Investors and analysts have seen Mr Evans as one of the top contenders to succeed Mr Joyce — the chief executive of Qantas since 2008 — when he eventually steps down.

Several other potential successors have already left over the years for CEO roles elsewhere, due in part to Mr Joyce’s unusually long tenure.

Qantas stocks rose slightly, by 0.2 per cent.

Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, US
Markets are volatile as investors debate how quickly interest rates will rise.(Reuters: Lucas Jackson)

High inflation weighing on investors

Meanwhile, US Federal Reserve chairman Jerome Powell testified before Congress for a second day — a day after saying the Fed was committed to cutting inflation at all costs, and acknowledged a recession was “certainly a possibility.”

Investors have been weighing the risk of hefty interest rate rises tipping economies into recession.

“What we’re seeing here is a [stock] market trying to absorb the Fed’s tightening and basically trying to put in a low in a bear market,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“We have [bond] yields that are coming down, and so that’s helping stocks.

‘Market is confused’

On Wall Street, the Nasdaq Composite rebounded by 1.6 per cent, to 11,232 points, as technology and growth stocks outperformed.

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