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The share market closed at a two-week high as a rebound in commodity prices and a two-week low in bond yields fuelled a broad-based recovery.
The S&P/ASX 200 climbed 69 points or 0.98 per cent to a fourth day of gains. A late bump in the closing auction lifted the index to 7115.2, its second highest close in 15 months.
Commonwealth Bank and Aristocrat Leisure hit records. Eighteen of the market’s 20 largest companies advanced. Ten of 11 sectors rose.
What moved the market
The big miners bounced off multi-week lows after copper rebounded and the Australian Bureau of Statistics (ABS) reported a record month of exports. Exports surged to a new peak in April, lifting the trade surplus to the third largest on record at $10.1 billion. Record iron ore prices were a key contributor, according to ABS Head of International Statistics, Andrew Tomadini.
“Increases in the exports of coal, petroleum, metalliferous ores and medicinal and pharmaceutical products were offset by declines in non-monetary gold and oil seeds. However, the continued strength of metalliferous ores has contributed to total exports for April 2021 reaching a record high $36 billion,” Mr Tomadini said.
“Following strong exports in March 2021, metalliferous ores increased another 1 per cent in April 2021 to record a historic high of $16.5 billion, driving record high exports.”
Fortescue Metals rose 1.64 per cent. Rio Tinto gained 1.63 per cent. BHP put on 1.3 per cent. Lower down the food chain, Pilbara Minerals gained 5.12 per cent, Perenti Global 3.88 per cent and Nickel Mines 3.06 per cent.
China’s state planner, the National Development and Reform Commission (NDRC), said today it will make plans to deal with fluctuations in commodity prices, including iron ore, copper and corn. Iron ore tumbled below US$200 a tonne yesterday after the NDRC summoned mining chiefs and issued a stern warning about hoarding or other market manipulation.
US and European equities advanced overnight as inflation fears continued to abate and cryptocurrencies rebounded. The S&P 500 gained 0.99 per cent. The Nasdaq Composite put on 1.41 per cent as falling yields encouraged traders to rotate into high-growth stocks.
Rate-sensitive growth stocks and bond proxies rallied here as the Australian ten-year yield dipped a basis point to 1.643 per cent, its lowest in two weeks. REITs, telecoms and healthcare were among the leaders. The tech sector touched a two-week high before fading.
Winners’ circle
Travel stocks took a fresh round of Melbourne Covid restrictions in their stride. The Victorian government this morning announced the reintroduction of limited restrictions from 6 pm tonight until at least June 4 after a fifth person tested positive. Masks will become mandatory indoors. Private and public gatherings will be limited.
Travel companies have formerly sold off on negative Covid news, but mostly held their ground this session. Webjet climbed 1.43 per cent to a three-week high. Corporate Travel Management rose 2.83 per cent and Sydney Airport 0.52 per cent. Qantas dipped 0.21 per cent. Flight Centre eased 0.33 per cent.
Tech gains dwindled by the close as the sector climbed for a fourth session. Afterpay gained 0.91 per cent, Altium 0.82 per cent and Nearmap 1.68 per cent.
Macquarie was the best of the financial heavyweights, rising 2.51 per cent. CBA added 0.88 per cent, ANZ 1.03 per cent, NAB 0.86 per cent and Westpac 0.85 per cent.
High-flying Aristocrat Leisure ascended 1.06 per cent to a new peak. Other notable gains at the market’s pointy end included Goodman Group +1.35 per cent, CSL +0.93 per cent and Brambles +1.13 per cent.
Software-as-a-service provider Technology One was briefly among the morning’s best performers after reporting a 48 per cent jump in half-year net profit to a record $28.2 million. The share price hit its strongest level this month before trimming its rise to 2.11 per cent.
Construction company Devine jumped 95.83 per cent to 23.5 cents after Cimic offered 24 cents per share for the part of the company it does not already own. Cimic previously held 59.11 per cent of the total shares in Devine. Cimic shares put on 1.13 per cent.
Doghouse
Non-bank lender Pepper Money made an underwhelming start to life as a listed entity, falling 9.69 per cent upon debut. Shares that listed at $2.89, valuing the company at $1.3 billion, closed at $2.61.
Heavyweight declines were scarce. Newcrest dipped 0.42 per cent. Telstra closed unchanged.
Gold stocks filled most of the lower slots on the index following a retreat in precious metals this morning. Gold declined $9.50 or 0.5 per cent to US$1,875 an ounce as the US dollar came off its low and Bitcoin turned negative. Here, Resolute Mining sagged 6.3 per cent, Regis Resources 2.67 per cent and Silver Lake Resources 2 per cent.
Nuix shed 5.49 per cent, Fisher & Paykel Healthcare 3.75 per cent and Seven West Media 4.76 per cent.
Other markets
US futures rallied as Asian markets gained momentum. The Asia Dow advanced 0.8 per cent. China’s Shanghai Composite tacked on 2.1 per cent, Hong Kong’s Hang Seng 1.35 per cent and Japan’s Nikkei 0.58 per cent. S&P 500 futures rose 11 points or 0.27 per cent.
Oil built on last night’s gains. Brent crude improved eight cents or 0.12 per cent to US$68.45 a barrel.
The dollar inched up 0.04 per cent to 77.53 US cents.
