Join our daily newsletter At The Bell to receive exclusive market insights
Vaccine news helped lift the ASX to a new 11-month peak before caution set in ahead of tomorrow’s market holiday.
The S&P/ASX 200 put on as much as 32 points after the Therapeutic Goods Administration granted provisional approval for Pfizer’s Covid-19 vaccine. The announcement clears the way for vaccinations to start in Australia next month.
The index trimmed its final tally to 24 points or 0.36 per cent as traders reduced exposure ahead of a slew of corporate profit updates on Wall Street.
What moved the market
Gains in retailers, iron ore miners and banks outweighed declines in industrials and gold and energy companies. Fortescue Metals, Rio Tinto and Wesfarmers did the heavy lifting. Transurban, Newcrest and Woodside Petroleum were among the drags.
Investors were caught between brightening long-term prospects for the economy as vaccines finally become available in Australia and near-term concerns about open positions over the Australia Day holiday. Wall Street will trade twice before the ASX re-opens on Wednesday.
The prospects for tonight appeared promising: S&P 500 futures climbed 15 points or 0.4 per cent by the close of Australian trade. Nasdaq futures went even better, rising 96 points or 0.7 per cent. Caution prevailed on the ASX as traders waited to see if earnings from the likes of Apple, Facebook and Microsoft justify Wall Street’s run to record highs.
Also crimping gains was a downbeat end to last week in the US as the potential economic hit from negative pandemic developments became too significant to ignore. The S&P 500 eased 0.3 per cent.
“There was one negative Covid-19 news story after another on Friday and which equity investors ultimately couldn’t ignore,” NAB Head of FX Strategy Ray Attrill said. “These ranged from the announced lockdown of parts of Kowloon (for the first time during the pandemic) as well as Malaysian holiday resorts; record high daily new case numbers in some countries, Mexico for one; reports that the new UK Covid variant was not only more infectious but, PM Johnson said, perhaps a third more deadly that the original strain; and in the EU, widespread dismay being expressed by political leaders that Astra Zeneca (and also Pfizer) were not going to be able to deliver vaccine doses in coming weeks anywhere close to the numbers they had contracted to supply with various governments.”
Winners’ circle
The big three ore producers ignored a dip in the ore price triggered by fears Chinese demand might weaken during the nation’s worst Covid outbreak since March. Fortescue Metals climbed 4 per cent, Rio Tinto 2.1 per cent and BHP 1.1 per cent.
Wesfarmers’ push into record territory extended into a sixth session. The retail conglomerate gained 1.7 per cent. Kogan tacked on 3.8 per cent, Carsales.com 1.4 per cent and JB Hi-Fi 2 per cent. Supermarkets Woolworths and Coles added 1.1 and 1.6 per cent, respectively.
The big four banks finished modestly higher after trading in and out of positive territory. CBA and ANZ gained 0.2 per cent. NAB and Westpac finished less than 0.1 per cent ahead.
Other heavyweight risers included Afterpay +1.5 per cent, Goodman Group +1.6 per cent and Telstra +0.3 per cent.
Gambling group PointsBet inched up 0.6 per cent to a record on news it had signed former basketball great Shaquille O’Neal as a brand ambassador.
Doghouse
Energy was the biggest drag on the market amid concerns new restrictions in China and Hong Kong will undermine oil demand. Woodside Petroleum fell 0.9 per cent, Santos 0.7 per cent and Oil Search 1.2 per cent. Fuel retailer Ampol sank 4.9 per cent after completing a share buyback.
The vaccine news was too well telegraphed to bring any relief to the beaten-down travel and tourism sector. Travel agents Flight Centre and Webjet fell 3.3 and 3.8 per cent, respectively. Qantas shed 1.7 per cent.
A soft finish to last week for precious metals weighed on gold stocks. Saracen Mineral eased 2 per cent, Regis Resources 1.6 per cent and Newcrest 1.6 per cent. Silver Lake finished flat after reaffirming its gold sales guidance and upgrading its copper guidance.
Beyond the resources space, the biggest weights at the top end of the market were Transurban -2 per cent, Brambles -0.6 per cent and Aristocrat Leisure -0.3 per cent.
Other markets
Asian markets built steadily as the session advanced. China’s Shanghai Composite reversed early weakness to rise 0.56 per cent. Hong Kong’s Hang Seng surged 2.07 per cent. Japan’s Nikkei added 0.46 per cent.
Gold added to Friday’s $9.70 loss. The yellow metal fell $2.80 or 0.15 per cent to $US1,853.40 an ounce. Brent crude dipped six cents or 0.1 per cent to $US55.35 a barrel.
The dollar rose 0.36 per cent to 77.37 US cents.
Hot today and not today
Hot today: Shares in Altech Chemicals (ASX:ATC) rallied on news tests have begun on the company’s experimental coating technology for improving the life and capacity of lithium-ion batteries. The company has developed a process for coating graphite particles with a thin layer of alumina that it hopes will improve battery performance. Testing has commenced on a batch of electrodes produced using Altech’s technology, as well as a control group. The share price climbed 24.5 per cent.
Not today: An unexpected drop in revenue last quarter weighed on one of this year’s big growth stories. Tech seller Harris Technology Group (ASX:HT8) slid 18.4 per cent after announcing revenue eased from $9.8 million in the first quarter of FY21 to $9.6 million in the last three months of the year as demand for pro-hygiene products slowed. The company said overall sales were flat despite record Black Friday/Cyber Monday sales. Shares in the company have surged over the past nine months from below two cents in April to above 20 cents in December.
