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The share market extended its longest winning run of the year with buyers encouraged by the resumption of Russia-Ukraine peace talks and a big-spending Federal Budget.
The S&P/ASX 200 climbed 50 points or 0.67 per cent to a seventh straight gain. The index closed above 7500 for the first time since the opening week of the year.
Tech stocks led for a second day, supported by gains in healthcare companies, retailers and banks. Energy producers and miners retreated with crude, gold and most industrial metals.
What moved the market
Growth stocks outperformed for a second day as risk appetite continued to improve, borrowing costs backed off multi-year highs and investors sought potential winners from last night’s Federal Budget.
“The government has unveiled its giveaway budget full of spending and investments ahead of the general election,” Kunal Sawhney, chief executive of research group Kalkine, said.
“In line with the market expectations, there are plenty of winners in the pre-election budget, including motorists, taxpayers, women, low-income earners, defense, infrastructure, small businesses, first-home buyers, apprentices, parents, tourism operators and aged care workers.
“The budget carried a range of significant measures, including a cut to fuel excise, massive investment for rail and road projects and new spending for a cyberwarfare and defense initiative.”
The tech sector hit a ten-week high on positive leads from the Nasdaq and budget measures. Last night’s budget offered small and medium businesses a tax incentive to invest in digital skills, technology and security.
Potential winners from the measure to rally this session included Xero +5.28 per cent, Megaport +6.97 per cent and NextDC +3.58 per cent. Other tech stocks to fire included Afterpay parent Block +6.12 per cent, Life360 +9.63 per cent and Novonix +5.81 per cent.
Other budget winners included retailers (one-off cash payment, income tax offset) and automotive companies (fuel excise halved). In the retail space, Domino’s Pizza gained 5.75 per cent, Harvey Norman 1.78 per cent and Collins Foods 1.46 per cent. JB Hi-Fi climbed 1.16 per cent to a new record.
In the automotive space, Super Retail Group put on 1.53 per cent, Bapcor 1.39 per cent and Viva Energy 0.42 per cent.
US and European stocks rallied overnight as Russia-Ukraine ceasefire negotiations resumed after a two-week break. The S&P 500 put on 1.23 per cent and the Nasdaq Composite 1.84 per cent. The pan-European Stoxx 600 jumped 1.74 per cent.
Investor sentiment was further boosted by declines in commodity prices. Crude oil dropped briefly below US$100 a barrel in the US. Wheat, nickel, aluminium and other metals declined.
Winners’ circle
Property giant Charter Hall Group climbed 1.05 per cent after striking a deal to acquire asset manager Irongate in partnership with a Dutch pension fund. The partnership will pay Irongate shareholders $1.90 cash per stapled security.
Blue-chips to advance included Goodman Group +2.49 per cent, CSL +1.68 per cent, Macquarie Group +2.1 per cent and Wesfarmers +1.03 per cent. NAB climbed 0.84 per cent to a four-and-a-half year high.
Eagers Automotive shareholders welcomed news the group will acquire a portfolio of car dealerships in the ACT. The company will pay $205 million for WFM Motors. The Eagers share price climbed 2.91 per cent.
A sharp rebound in Magellan extended into a second day. The battered fund manager gained 8.53 per cent.
A week of extreme responses to positive drilling results continued as Culpeo Minerals briefly joined the “tripled-in-a-day” club. Shares in the South America-focussed copper explorer ran from 12.5 cents yesterday to 45 cents today on news the first hole of a drilling program intersected visible sulphide copper. The share price finished 104 per cent ahead at 25.5 cents.
Doghouse
Mining stocks retreated as some of the “war premium” came out of commodity prices. South32 fell 3.49 per cent, Whitehaven Coal 3.53 per cent and Ramelius Resources 4.58 per cent.
At the heavyweight end, BHP dipped 0.08 per cent, Santos 0.63 per cent and Woodside 0.82 per cent.
Telstra faded 0.76 per cent on news CEO Andy Penn will stand down after seven years at the helm. Chief Financial Officer Vicki Brady will take over as CEO on September 1.
Casino group Star Entertainment declined 1.84 per cent after acknowledging receipt of a class action filed by Slater & Gordon. The claim alleges Star failed to meet its continuous disclosure obligations and engaged in misleading conduct. Star said it would defend the proceedings.
88 Energy lost almost half of its market value following disappointing drilling results in Alaska. Wireline logging indicated the Merlin-2 well did not warrant a production test. Shares that traded as high as 9.7 cents last April hit 1.3 cents this morning before paring their fall to 48.48 per cent.
Other markets
A broadly positive session on Asian markets saw the Asia Dow improve 0.25 per cent, China’s Shanghai Composite 1.29 per cent and Hong Kong’s Hang Seng 1.15 per cent. Japan’s Nikkei dropped 1.7 per cent.
US futures faded in afternoon trade. S&P 500 futures eased nine points or 0.2 per cent.
Oil reversed almost half of last night’s 2 per cent decline. Brent crude rose US$1.04 or 0.94 per cent to US$111.27 a barrel.
Gold rebounded US$13.30 or 0.7 per cent to US$1,925.50 an ounce.
The dollar rallied 0.15 per cent to 75.25 US cents.
