The share market halved a post-Christmas rally by the close as declines in mining and yield stocks undercut gains elsewhere.
The S&P/ASX 200 finished 35.5 points or 0.5 per cent ahead after being up as much as 60 points. The market hit its peak in the first ten minutes, then spent much of the session in gentle decline.
What moved the market
The opening bounce followed a record night on Wall Street after President Donald Trump unexpectedly signed a US$2.3 billion funding package into law. Trump caved in to political pressure after sitting on stimulus and government funding bills for five days. The backflip averted a federal government shutdown tonight and restored benefits for 14 million Americans.
The S&P 500 jumped 32 points or 0.87 per cent as all three major US indices hit intraday highs. Germany’s main index advanced to a record after the European Union and UK signed a trade deal.
“By and large, it’s a kind of broad-based optimism, so-far-so-good on the vaccine rollout, and the stimulus bill to bridge the gap,” Ross Mayfield, investment strategist at Baird, told MarketWatch. “It’s really just a continuation of the broader strength that we’ve seen over the last couple of months.”
Japan’s Nikkei 225 index today soared 2.1 per cent to its highest level since 1991. Elsewhere in the region, Hong Kong’s Hang Seng gained 1.1 per cent. China’s Shanghai Composite dropped 0.3 per cent.
Buy now pay later juggernaut Afterpay steered the technology sector to the top of the leader board, rising 5.3 per cent. Bravura Solutions gained 4 per cent and Iress 2.6 per cent.
Post-Covid recovery prospects saw solid gains as infection figures continued to moderate in NSW. The state today reported six new cases. Flight Centre rose 4.3 per cent, Webjet 4.5 per cent and Qantas 1.4 per cent.
The big four banks hit their highs early in the session, finishing well off their peaks. CBA gained 1 per cent, Westpac 0.6 per cent, ANZ 0.6 per cent and NAB 0.5 per cent. Other heavyweight movers included Goodman Group +1.4 per cent and Transurban +0.5 per cent. Fortescue Metals was the only one of the mining majors to finish ahead, adding 1.5 per cent.
Crown Resorts rallied 0.5 per cent after opening its Crown Towers luxury hotel, bar and restaurant complex in Sydney yesterday. The proposed casino at the complex remained on hold pending the result of an inquiry into the company’s suitability to hold a licence.
A2M Milk continued to heal after a profit warning. The company improved 5.8 per cent after acquiring a 75 per cent stake in a New Zealand milk company.
Speculative interest in the market remained strong. The S&P/ASX Emerging Companies Index rose 1.9 per cent to an all-time high. The Small Ords advanced 1.3 per cent and has outpaced the broader market by regaining all of its pandemic losses
Yield stocks gave up gains as US treasury yields improved. Supermarket Woolworths shed 0.4 per cent and CSL 0.1 per cent. Coles finished flat.
BHP and Rio Tinto faded to losses of 0.1 per cent. Gold giant Newcrest fell 0.9 per cent.
Beach Energy took the biggest dive on the index, sliding 4.3 per cent after reporting its latest offshore well was a duster (see below for more). Other notable falls included IDP Education -2.4 per cent, Reliance Worldwide -1.7 per cent and AusNet -1.4 per cent.
US index futures built on last night’s record close. S&P 500 futures climbed 15 points or 0.4 per cent this afternoon.
Oil rebounded from last week’s soft finish. Brent crude reversed 20 cents or 0.4 per cent to $US51.10 a barrel. Gold bounced $1.90 or 0.1 per cent to $US1,882.30 an ounce.
The dollar steadied just below 76 US cents. The Aussie was last up 0.1 per cent at 75.96 US cents.
Hot today and not today
Hot today: Intra Energy Corp (ASX:IEC) briefly doubled in value as investors welcomed progress in the explorer’s Mozambique gold project. The company’s African subsidiary has begun fundraising to start drilling at the Minas Do Lurio project. The aim is to finalise a geological resource by Q1 2022. Shares ran from 0.7 cents to 1.5 cents before ending at 1.1 cents, a gain of 57.1 per cent.
Not today: A bleak end to the year for investors in Cue Energy (ASX:CUE). The junior explorer lost almost two-thirds of its market value after a much-anticipated gas exploration well in WA’s Carnarvon Basin came up empty. High hopes for the first well in the Ironbark gas prospect were dashed when the drill bit reached 5,618 metres without encountering hydrocarbons. Cue, which had a 21.5 per cent share in the well, plunged 58.7 per cent. Partners Beach Energy (ASX:BPT) and New Zealand Oil & Gas (ASX:NZO) sank 4.3 and 25 per cent, respectively.