The share market closed at its highest level since the first week of the pandemic meltdown, fuelled by positive US futures, a record high for Afterpay and a production upgrade from BHP.
The S&P/ASX 200 broke out of a sideways trading range that had capped gains since late November. The index rallied 28 points or 0.4 per cent to 6770, its best close since February 25.
Solid gains in the technology sector, industrials, energy and materials outweighed declines in REITs and the banks.
What moved the market
The stars finally aligned for a crack at higher levels following several market-friendly developments. A record half from BHP reaffirmed strong Chinese demand for Australian iron ore. A broker upgrade powered Afterpay to yet another peak. Positive overnight leads from the US were supported by gains in US futures ahead of the inauguration tonight of President-elect Joe Biden.
S&P 500 futures rose four points or 0.1 per cent as Netflix soared 12.2 per cent in after-market trade. Nasdaq futures jumped 0.3 per cent.
Overnight, the S&P 500 put on 0.81 per cent after Treasury Secretary nominee Janet Yellen called for major federal government stimulus measures. The former Fed Chair said the federal government should "act big" to power the economy out of its pandemic slowdown.
Biden is due to be sworn into office tonight in a heavily-fortified Washington DC. Protests by Trump supporters around the country have been curbed by ramped-up security around capital buildings.
“Everything else could take a back seat to events in Washington as investors look ahead to big changes in policy and outlook from a new administration,” JJ Kinahan, chief market strategist at TD Ameritrade, told CNBC.
The heavily-weighted mining sector supplied much of today's momentum. BHP climbed 0.9 per cent after reporting record half-year iron ore production from WA. The Big Australian raised its guidance after restarting its Brazilian operations last month.
Elsewhere in the mining sector, Lynas Rare Earths gained 4.9 per cent, Perseus Mining 4.2 per cent, Newcrest 2.2 per cent and South32 1.5 per cent. Rio Tinto inched up 0.1 per cent and Fortescue Metals less than 0.1 per cent.
Afterpay led a rally in the BNPL sub-sector, rising 5.2 per cent after Jefferies raised its shares to 'Buy', citing expansion opportunities in Asia and Europe. Shares hit $142.30 today, less than 10 months after bottoming at $8.01 in March. Z1P Co climbed 1.7 per cent, Sezzle 4.4 per cent and Laybuy Group 2.2 per cent.
A rebound in US tech giants overnight helped the local sector. WiseTech rose 4.8 per cent, Bravura Solutions 4.1 per cent and Nearmap 2.4 per cent.
Energy stocks rose after overnight strength in oil made the sector Wall Street's best performer. Beach Energy gained 2.1 per cent, Woodside 1.8 per cent and Santos 0.8 per cent. Brent crude climbed 34 cents or 0.6 per cent today to $US56.24 a barrel, extending last night's 2.1 per cent advance.
Other notable gains at the top end of the market included Transurban +4.2 per cent and Aristocrat Leisure +4.3 per cent. Wesfarmers gained 0.5 per cent and Coles 0.7 per cent.
A profit upgrade lifted Ansell 3.6 per cent. The company said it had seen strong demand for its personal protection products, due to Covid-19. Meditech Polynovo jumped 7.3 per cent on news it had signed distribution deals for its products in Turkey and Poland.
A new field services contract with Telstra worth $330 million over five years lifted engineering and construction group Downer EDI 1.7 per cent. Telstra shares rose 0.3 per cent.
Priceline pharmacy operator Australian Pharmaceutical Industries gained 0.4 per cent despite CEO and Managing Director Richard Vincent warning retail conditions remained "challenging". Vincent declined to provide profit guidance at today's AGM.
Broker upgrades helped lift fund manager HUB24 7.1 per cent to a record following yesterday's well-received trading update.
Real estate investment trusts struggled after a rise in US bond yields sucked funds out of traditional bond alternatives. Goodman Group fell 0.7 per cent. BWP Trust slid 3 per cent, SCA Property Group 2 per cent and Scentre Group 1.7 per cent.
The big four banks soured as the session wore on. CBA and ANZ both lost almost 0.9 per cent, NAB 0.5 per cent and Westpac 0.1 per cent. CSL and Woolworths both shed less than 0.1 per cent.
Aged care provider Regis Healthcare tumbled 8.1 per cent after suitor Washington H. Soul Pattinson abandoned its takeover attempt. WHSP announced it had withdrawn its proposal after the Regis board knocked back two indicative offers. WHSP shares fell 0.5 per cent.
A subdued session in Asia saw Hong Kong's Hang Seng add 0.3 per cent and Japan's Nikkei shed 0.5 per cent. China's Shanghai Composite traded unchanged.
Gold firmed $9.30 or 0.5 per cent to $US1,849.50 an ounce.
The dollar inched up 0.09 per cent to 77.2 US cents.
Hot today and not today
Hot today: Explorer Hammer Metals (ASX:HMX) almost tripled in value after striking copper and gold near Mount Isa. The company reported the previously undrilled Trafalgar prospect returned promising intercepts from two holes drilled so far. "To intercept a broad zone of significant sulphide mineralisation containing both gold and copper with two wide spaced holes is extremely encouraging," Managing Director Daniel Thomas said. Speculators agreed. The share price bolted from 3.3 cents to 9.7 cents, before settling at 9.1 cents a gain of 175.8 per cent.
Not today: Shares in Frontier Digital Ventures (ASX:FDV) slumped after the online classifieds business announced a major investor had sold half its stake. Catcha Group took advantage of last week's record stock price to sell almost 46 million shares via an off-market block trade. The transaction slashed Catcha's holding in the company from 26.5 per cent to 13.1 per cent. Frontier's share price skidded 14.9 per cent.