SYDNEY: A milestone for Australian stocks hangs in the balance as investors weigh better-than-expected corporate earnings results against Covid-19 concerns.

       Of the 78 companies that have reported full-year results this month, 65% have met or exceeded earnings estimates, according to data compiled by Bloomberg.

       That’s helped the S&P/ASX 200 Index cling on to its 0.9% advance for August. It’s on the cusp of 11 straight months of gains, its longest streak on record, as the reporting season continues and Sydney’s delta-variant outbreak worsens.

       Company guidance has been “neutral, absent or negative” given virus uncertainty, UBS Group AG analysts led by George Tharenou wrote in a note.

       The delta variant has forced Australia to review its strategy of eliminating infections, and prompted Prime Minister Scott Morrison to say it’s highly unlikely his country will ever return to zero cases.

       Resources firms mostly beat profit expectations, and companies including Bluescope Steel Ltd, Oz Minerals Ltd and Woodside Petroleum Ltd declared stronger-than-expected dividends, Citigroup Inc analysts led by Liz Dinh wrote in a note. The broker maintained its above-consensus growth forecasts for the current fiscal year.

       Still, while mining giants BHP Group and Rio Tinto Ltd both posted solid results, the outlook for commodities and global growth is at risk as the delta variant drags on China and United States consumers, according to UBS’s Tharenou. The two producers each shed more than 10% last week as materials slumped.

       In other industries, construction materials, insurance and diversified financials are seeing strong forecast upgrades, according to Citi’s Dinh. But for the banking sector, “softness of core earnings prospects” was the key takeaway, she said. ― Bloomberg