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The share market’s run of weekly advances ended at four after a tax scare in the US ensured a soft end to a see-saw week.
The S&P/ASX 200 edged up five points or almost 0.1 per cent this afternoon. Advances in Rio Tinto, Fortescue and the banks narrowly outweighed declines in BHP, Newcrest and Afterpay.
What moved the market
The ASX 200 finished less than three points lower for a week that opened with a near 14-month high and featured a two-week low on Wednesday. The index roamed through a range of 189 points before finishing near where it started as investors weighed upbeat economic data against rising Covid rates in many parts of the world.
India recorded a world-record single-day infection tally of above 300,000 mid-week, prompting the federal government to announce a temporary reduction in incoming flights from India. Departures will also be limited.
“India appears to stand in a grave situation despite being the world’s largest vaccine producer. The nation’s healthcare system seems to be on the verge of collapse as it continues to struggle with a second wave of the fatal virus,” Kalkine Group CEO Kunal Sawhney said.
US stocks declined overnight despite positive signs from the labour market. Continuing claims for unemployment benefits fell to a pandemic-era low. The S&P 500 slumped 0.92 per cent after the threat of a sharp increase in capital gains tax triggered a mid-session sell-off.
“While the US job numbers are yet to completely revive to the pre-pandemic levels, the recent fall in the nation’s jobless claims to a new pandemic low adds to the evidence of a fortifying labour market. The job market seems to be gathering steam on the back of economic re-opening that is unleashing pent-up demand for workers. As the nation looks forward to accelerating the pace of COVID-19 vaccinations to an average of three million jabs per day, the labour market is expected to grow with a renewed vigour over the coming months,” Mr Sawhney said.
There were positive signals this session for the domestic outlook. Private-sector output recorded its strongest growth since the survey began in 2016. The IHS Markit Flash Australia Composite Output Index climbed to 58.8 from 55.5 last month. The report helped lift the dollar 0.36 per cent to 77.32 US cents.
Today’s report continued a run of broadly supportive updates this week. The economic calendar dries up next week, but the last week of the quarterly reporting season brings updates from the likes of Fortescue Metals, Newcrest, Woolworths, Coles and ResMed.
Winners’ circle
Sector moves were limited. Telecoms and financials tied for best with rises of 0.4 per cent. Consumer discretionary was worst with a fall of 0.99 per cent.
Telstra edged up 0.29 per cent after announcing it spent $277 million to secure 1000 MHz in the 26 GHz spectrum to extend its footprint in the 5G space. CEO Andrew Penn said the new spectrum would “dramatically increase capacity and speeds for Telstra customers”.
A late revival among the banks saw ANZ rise 0.42 per cent, CBA 0.28 per cent, NAB 0.27 per cent and Westpac 0.04 per cent.
Fortescue Metals was the best of the heavyweights, rising 1.59 per cent despite a second straight drop in iron ore yesterday. Rio Tinto inched up 0.51 per cent. BHP trimmed a deeper opening fall to 0.19 per cent. Other heavyweight gainers included Goodman Group +0.63 per cent and CSL +0.2 per cent.
AMP bounced 0.89 per cent off a 12-month low after announcing plans to demerge its private markets business after sale discussions with a US investment firm failed to produce a deal. Chair Debra Hazelton said a demerger would better serve both the firm’s retail and institutional client bases. Shareholders would receive shares in the new company.
Accent Group rallied 11.15 per cent to an all-time high on news the retailer will acquire youth apparel chain Glue Store and Next Athleisure for $13 million. Accent already operates a range of brands, including Athlete’s Foot, Timberland, Dr Martens and Vans.
Doghouse
A spike in operating costs sent online retailer Kogan down 14.27 per cent. Adjusted quarterly earnings declined by almost a quarter as a dip in customer demand caused unsold inventory to pile up, incurring higher warehousing costs. The company intends to increase promotions to move stock.
Supermarkets Woolworths and Coles dropped 0.31 and 0.82 per cent, respectively. Other heavyweight drags included Brambles -1.5 per cent, Newcrest -0.91 per cent, Afterpay -1.18 per cent and Wesfarmers -0.78 per cent.
Oil Search ended flat after reaffirming full-year production guidance but cutting its investment spend as Covid ravaged Papua New Guinea. First-quarter operating revenue increased by 16 per cent from December, despite a 2.7 per cent dip in production.
Other markets
Most Asian markets advanced. The Asia Dow put on 0.33 per cent. China’s Shanghai Composite inched up 0.03 per cent and Hong Kong’s Hang Seng 0.64 per cent. Japan’s Nikkei retreated 0.81 per cent.
Oil built on slender overnight gains. Brent crude climbed 34 cents or 0.52 per cent to US$65.74 a barrel.
Gold recouped a fraction of its overnight losses, rising $2.10 or 0.12 per cent to US$1,784.10 an ounce.
