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Soaring commodity prices helped power the share market to within a hundred points of where it started the year.
The S&P/ASX 200 rallied 22 points or 0.4 per cent to its highest close since late February. At today’s peak, the index rose to within 1.3 per cent of where it opened on January 1.
A lot has happened since then. The index climbed to an all-time high in February before losing more than a third of its value in five harrowing weeks as Covid-19 plunged the global economy into a deep freeze.
What moved the market
China was first to suffer and first recover. A rebound in demand for raw materials lifted iron ore towards its highest level in six years last week and copper to a two-year high. Oil rose for a third straight week and continued higher today.
Also helping the market mood was the re-opening of the border between the country’s two most populous states. The NSW-Victorian hard border came down after 137 days. Restrictions in Victoria eased further in another hopeful sign for the economy.
That provided enough momentum for our market to shrug off weak leads from the US. The S&P 500 fell 0.68 per cent on Friday. Traders here kept an eye instead on steady gains in US index futures. S&P 500 futures were last up 10 points or 0.3 per cent, signalling potential gains ahead of Thursday’s Thanksgiving US market holiday.
“Stocks this week will trade on lockdown concerns and rising cases, but could see a boost into early December as the optimism around a near term, stopgap stimulus package grows,” Shannon Saccocia, Chief Investment Officer at Boston Private in the US, told CNBC. “Overall, the push and pull between tech stocks and cyclicals will likely continue through the next couple of weeks.”
Winners’ circle
The nation’s mining giants led today’s charge. BHP rose 2.5 per cent, Rio Tinto 1.5 per cent and Fortescue Metals 3.9 per cent. Goldminer Newcrest put on 0.9 per cent.
The energy sector scaled a new five-month peak as oil built on three weeks of gains. Brent crude climbed 23 cents or 0.5 per cent this afternoon to $US45.19 a barrel. The global benchmark put on 5.1 per cent last week.
Ampol jumped 4.6 per cent after announcing a $300 million off-market share buy-back and completing a property sale worth $635 million. Oil Search added 4.8 per cent, Santos 3.4 per cent, Woodside Petroleum 1.6 per cent and Origin Energy 2.8 per cent.
A mixed session for the financial sector saw gains in Macquarie Group +2.2 per cent, Westpac +0.1 per cent and NAB +0.04 per cent offset by dips in CBA -0.5 per cent and ANZ -0.3 per cent. CSL put on 1 per cent.
Helloworld‘s shares advanced 4.1 per cent to their strongest level since June on news the travel agent acquired wholesaling specialist CruiseCo. Qantas climbed 1.7 per cent after announcing plans to boost capacity as borders re-open.
An increased takeover offer from private-equity suitor BGH lifted Village Roadshow 16.3 per cent. Monadelphous climbed 2.5 per cent after winning new construction and maintenance contracts from BHP and Rio Tinto worth roughly $60 million.
Mesoblast soared another 17.6 per cent on the back of Friday’s announcement of a deal with Swiss multinational Novartis potentially worth up to $750 million, according to CEO Silviu Itesu.
G8 Education hit a three-week low, then bounced 1.6 per cent following media reports law firm Slater and Gordon filed a class action alleging the childcare centre operator breached its continuous disclosure market obligations. G8 said it would defend any proceedings.
Z1P Co rose 0.3 per cent after reporting a strong start to the financial year. The buy now pay later firm increased revenues by 91 per cent to $967 million over the first four months.
Doghouse
Exchange operator ASX dipped 0.9 per cent on confirmation the regulator ASIC was investigating last Monday’s market outage. ASX said it would co-operate with the investigation.
Property companies dragged. Unibail-Rodamco-Westfield fell 2.2 per cent, Growthpoint Property 2.2 per cent and SCA 1.6 per cent. Supermarkets also declined as traders chased assets better aligned with economic recovery. Woolworths eased 0.5 per cent and Coles 0.2 per cent.
Other markets
A mixed session in Asia saw China’s Shanghai Composite advance 0.9 per cent and Hong Kong’s Hang Seng ease 0.2 per cent. Japanese markets were closed for Labor Thanksgiving Day.
Gold opened the week lower. December gold was lately down $1.40 or less than 0.1 per cent at $US1,871.10 an ounce.
The dollar was flat at 73.13 US cents.
Hot today and not today
Hot today: The National Stock Exchange of Australia, a subsidiary of NSX Ltd (ASX:NSX), took a big step towards becoming a genuine alternative to the ASX with the integration of its Trade Acceptance Service into the ASX Clear system. Traders can now enter orders through IRESS via a select group of brokers, including Bell Potter and Morrisons. The company hopes to establish its Digital Exchange Subregister System (DESS) as an alternative to the long-standing CHESS system used by the ASX. NSX shares surged 45.3 per cent.
Not today: Insurer IAG (ASX:IAG) slumped 6 per cent as trade resumed following a court decision that exposes the industry to hundreds of millions of dollars in potential claims for Covid-related business woes. A NSW court ruled in a test case last week that pandemic exclusions that relied on an act repealed in 2015 did not cover business losses resulting from Covid-19. The company announced it had raised $650 million from institutions to strengthen its balance sheet.
