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The All Ordinaries rallied to within 1 per cent of an all-time high as the share market’s February bull run continued.
The broader of the two major domestic benchmarks hit 7181.2, just 74 points off last February’s record finish, before trimming its gain to 48 points or 0.67 per cent at 7160.8. Today’s advance was the index’s fifth from six sessions this month.
The S&P/ASX 200 cracked 6900 for the first time in almost a year, drawing within 3.7 per cent of its old high. The benchmark finished 40 points or 0.59 per cent head at 6881, its strongest finish since February 25 last year.
What moved the market
The big miners did the heavy lifting, with willing support from Afterpay, Wesfarmers, Woolworths and most of the banks. Fibre networks specialist Vocus Group surged on takeover interest. A profit upgrade lifted Sigma Healthcare.
The market’s gains were capped by declines in utilities and REITs that thrive when bond yields are low. On Friday, US yields hit their highest level since March.
Buyers were encouraged by buoyant US futures following Wall Street’s best week since November. S&P 500 futures rallied 17 points or 0.43 per cent. On Friday, the S&P 500 put on 0.39 per cent to extend its tally for the week to 4.65 per cent.
“Looking at the week, it was an impressive one for US equities, all five days recorded gains and it was the best performing week since early November,” NAB Currency Strategist Rodrigo Catril said. “Solid company earnings reports were one driver for the gains in equities while rising hopes of a new big US fiscal stimulus was another.”
Winners’ circle
The top four miners provided much of the muscle behind the up-move following gains in industrial and precious metals. Rio Tinto gained 3.4 per cent, BHP 2.4 per cent and Fortescue Metals 2.1 per cent. Newcrest rose 1.4 per cent after gold regained the US$1,800 an ounce level.
The threat of tighter regulation in the UK has done little to slow the relentless rise of Buy Now Pay Later leaders Afterpay and Z1P Co. Afterpay advanced 1.4 per cent to a new peak following a broker recommendation from Seaport Global Securities. Z1P rose as much as 19 per cent to an all-time high before tapering its advance to 12.9 per cent.
Westpac was the pick of the big four banks, rising 1.4 per cent despite a downgrade from Morningstar. NAB gained 0.9 per cent and ANZ 0.4 per cent. CBA, which reports half-yearly earnings on Wednesday, closed just below break-even, down less than 0.1 per cent.
Takeover interest lifted Vocus Group 12.8 per cent to its strongest level since 2016. The fibre networks specialist said it had received a non-binding, indicative offer from Macquarie Infrastructure and Real Assets Holdings valuing the company at $3.4 billion.
A profit upgrade boosted Sigma Healthcare 7.4 per cent. The pharmaceutical wholesaler and operator said it expects first-half underlying earnings before tax to be more than 35 per cent stronger than the same period last year at around $80 million.
REA Group rallied 3.2 per cent to a new record following a broker upgrade from Jefferies. On Friday, a recovery in the property market helped the online listings firm report first-half net profit increased by 13 per cent to $171.2 million.
Mining tech company Imdex climbed 7.3 per cent to a level last seen in 2013 after lifting pre-tax half-year earnings by six per cent. Charter Hall Long WALE REIT ended flat after declaring a statutory half-year net profit of $198.6 million.
Doghouse
Traditional alternatives to government bonds declined amid speculation the multi-year downtrend in US yields is ending, enticing funds back to the bond market. On Friday, ten-year US yields hit their highest level since March.
Here, bond proxies Goodman Group and Transurban both fell 1.2 per cent. Charter Hall Retail sank 2.8 per cent, BWP Trust 2.5 per cent and Spark Infrastructure 1.8 per cent.
News Corp eased 3 per cent from Friday’s post-earnings record. AGL and Origin continued to suffer hangovers following profit warnings last week, falling 2 and 3.5 per cent, respectively.
Other markets
A milestone session on Asian markets saw Japan’s Nikkei climb 1.86 per cent to its highest level since 1990. Hong Kong’s Hang Seng added 0.66 per cent and China’s Shanghai Composite 1.06 per cent.
Oil surged ever closer to the US$60 a barrel level. Brent crude rallied 62 cents or 1 per cent to $US59.96 a barrel.
Gold faded $2.60 or 0.1 per cent to $US1,810.40 an ounce.
The dollar eased 0.05 per cent to 76.74 US cents.
Hot today and not today
Hot today: Drilling success in Canada lifted gold explorer Tempus Resources (ASX:TMR) 22.9 per cent. Five of the first 11 holes at the company’s Blackdome Elizabeth Gold Project in British Columbia intersected more than five grammes of gold per tonne. Tempus Resources President Jason Bahnsen said, “The Phase 1 drilling results confirm the high-grade potential of Elizabeth.” Drilling will continue in the Canadian spring.
Not today: Cann Group (ASX:CAN) took shareholders on a rollercoaster ride. The company suffered a setback in its ambition to be a world-class supplier of medicinal cannabis after falling victim to an elaborate online scam. Approximately $3.6 million intended for an overseas contractor was intercepted by an unknown third party in a sophisticated cyber fraud. The cash was payment for works relating to Cann’s Mildura cultivation facility. Police in four nations are involved. The share price fell as low as 59.5 cents before closing unchanged at 66 cents.
