Aussie shares rebounded from six-week lows as the unemployment rate fell to a pandemic-era low and the tech sector surged more than 4 per cent.
The S&P/ASX 200 bounced 88 points or 1.27 per cent, recouping much of yesterday’s 134-point loss.
The tech sector climbed 4.3 per cent to its biggest gain since early April. Afterpay and Altium led the rally.
The market extended gains after jobs data showed the end of JobKeeper had minimal impact on employment. A recovery in cryptocurrencies following a volatile 24 hours helped US futures reverse losses.
What moved the market
Concerns about a jobs crash when the JobKeeper scheme ended were at least partly assuaged by news the jobless rate declined two basis points last month to 5.5 per cent from 5.7 per cent in March. JobKeeper ended on March 28. At 5.5 per cent, the unemployment rate was just two basis points above where it sat at the start of the pandemic. The dollar bounced 0.35 per cent to 77.47 US cents.
“We have not seen large changes in the indicators that would suggest a clear JobKeeper impact, such as an increase in people working reduced or zero hours for economic reasons or because they were leaving their job,” Bjorn Jarvis, head of labour statistics at the Australian Bureau of Statistics, said. “We also haven’t seen large net flows out of employment across many population groups.”
A 30,600 decline in employment might be connected to JobKeeper or simple seasonal fluctuations, Mr Jarvis added.
“Some of the 31,000 fall in employment may relate to the end of JobKeeper, but it could also reflect usual month-to-month variation in the labour market and some larger than usual seasonal changes similar to those we saw earlier in the year.”
US futures moved towards break-even as Bitcoin and other cryptocurrencies recovered. Bitcoin rose 3.7 per cent to US$39,667 after plunging 31 per cent overnight and trading below US$36,000 this morning. S&P 500 futures were last off less than a point or 0.01 per cent. Overnight, the US benchmark dropped 0.29 per cent to a third straight loss.
“Bitcoin fell from around $44,000 this time yesterday to as low as $30,000 – an eyewatering 31% single day decline – before recovering to around $38,000. It’s always hard to pin down the exact drivers but sentiment this past week looks to have undermined by Elon Musk’s about-turn on bitcoin, as well as the threat of regulatory intervention with Chinese banking and payment industry bodies issuing a statement warning financial institutions not to conduct virtual currency related business, including trading or exchanging fiat currency for cryptocurrency,” NAB Director of Economics, Tapas Strickland, said.
The battered tech sector rallied to its highest in a week after the US sector recovered overnight. The Nasdaq Composite closed near even after being down as much as 1.7 per cent. Here, Afterpay rose 7.67 per cent, Altium 6.63 per cent and Nearmap 5.14 per cent,. EML Payments bounced 3.93 per cent after losing almost half its value yesterday on news of regulatory trouble in Europe.
Commonwealth Bank claimed a new record close, rising 3.23 per cent. Westpac gained 1.35 per cent, ANZ 2.01 per cent, NAB 1.61 per cent and Macquarie Group 0.26 per cent.
Healthcare giant CSL advanced 1.35 per cent. Cochlear put on 1.66 per cent and ResMed 1.61 per cent.
Qantas rallied and travel agents reeled after the airline declared it will slash the commission it pays agents for international tickets from 5 per cent to 1 per cent. The airline’s shares improved 3.42 per cent. Flight Centre sagged 2.42 per cent, Webjet 0.85 per cent and Helloworld 3.18 per cent.
News that earnings more than doubled in the first half helped lift Nufarm 3.27 per cent. The agribusiness lifted underlying earnings by 118 per cent to $233.6 million from the prior corresponding period.
Miners declined after copper dropped below US$10,000 a tonne and iron ore reversed for the first time this week. BHP retreated 1.05 per cent, Rio Tinto 0.5 per cent and Fortescue Metals 0.09 per cent. Woodside dipped 0.18 per cent as oil recovered from three-week lows.
Mineral sands miner Iluka slid 4.41 per cent after taking steps towards closing its underperforming Sierra Rutile operation in Sierra Leone. The miner said it had given the government of Sierra Leone six months’ notice of its intent to suspend operations while it explores measures to reduce costs and return to profitability.
Australian Agriculture Co slipped 0.82 per cent after declaring a first-half operating profit of $24.4 million. The cattle company warned below-average rainfall would impact meat production.
Data analytics firm Nuix dived 6.83 per cent following media reports about potential class actions and a dispute with a former CEO. AusNet dropped 2.54 per cent as it went ex-dividend.
Asian markets trimmed earlier falls. The Asia Dow cut its loss to 0.05 per cent. China’s Shanghai Composite dipped 0.19 per cent and Hong Kong’s Hang Seng 0.59 per cent. Japan’s Nikkei rallied 0.33 per cent.
Oil recovered from last night’s three-week low as risk sentiment improved this afternoon. Brent crude climbed 24 cents or 0.36 per cent to US$66.90 a barrel.
Gold retreated $7.20 or 0.38 per cent to US$1,874.30 an ounce.