A third straight winning week kept the share market on track for its best month since at least 1988 despite a limp finish today.
A dive in US futures complicated the local market’s bid for a fifth straight advance. A narrow, range-bound session saw the S&P/ASX 200 finish eight points or 0.1 per cent in the red.
For the week, the index put on 2.1 per cent. The advance extended the market’s November rally to 10.3 per cent.
What moved the market
The outlook for the session deteriorated as US index futures responded to several negative developments ahead of tonight’s trade. California issued a ‘limited’ stay at home order. Media reports said the White House and Federal Reserve were at odds over ending several stimulus programs due to expire at the end of the year.
The White House was also reported to be planning to release new rules tonight to clamp down on medicine prices. S&P 500 futures skidded 15 points or 0.4 per cent.
The downturn in futures overshadowed positive overnight leads. A late rally lifted the S&P 500 by 0.39 per cent after Senate Republicans agreed to resume negotiations for a new stimulus package. The Nasdaq Composite rose 0.87 per cent as traders bought tech stocks that have best weathered the pandemic downturn.
Here, a split market lacked conviction at the end of a long week. Some miners and banks advanced, some fell.
Small caps fared better than the big end of town. The Small Ordinaries rallied 0.3 per cent. Risk appetite at the speculative end of the market was underlined by a 0.8 per cent rise in the S&P/ASX Emerging Companies index to its highest level since 2011.
CBA was the pick of the banks, cushioning the market from a deeper loss with a gain of 1.4 per cent. The advance came after regulators slashed the amount of cash the bank had to hold as a buffer following a string of scandals. The Australian Prudential Regulation Authority halved the “operational risk overlay” to $500 million after a review of the bank’s risk management.
NAB inched up 0.1 per cent. Westpac was flat and ANZ lost 0.5 per cent. Rio Tinto’s 0.5 per cent advance was the best of the iron ore majors. Fortescue was unchanged. BHP dropped 1 per cent. Health giant CSL rose 1.1 per cent.
Aged care provider Regis Healthcare soared 23.4 per cent after knocking back an unsolicited offer from Washington H. Soul Pattinson and a family trust. Shares traded as high as $1.82, just below the $1.85 non-binding offer price. Regis said the bid “materially undervalues the company”. Soul Pattinson shares fell 5 per cent.
Other aged care providers also surged. Estia Health jumped 21.2 per cent and Japara Healthcare 27.4 per cent.
A downbeat financial outlook weighed on builder Lendlease, dragging the share price down 2.7 per cent. CEO and Managing Director Steve McCann warned, “While we are making good progress on our strategy, earnings in the first half of FY21 are expected to be subdued.”
Investors pushed Orica‘s share price down 4.1 per cent after the explosives manufacturer reported a 31 per cent slide in full-year statutory net profit. Managing Director Alberto Calderon said he was cautiously optimistic about a recovery in the year ahead.
Online retailer Kogan slid 4.5 per cent after shareholders narrowly approved a bumper payday for founders Ruslan Kogan and David Shafer. Today’s AGM passed an options package worth more than $100 million in the face of opposition from some shareholders and advisory firms.
Renewed lockdowns in Europe and the US prompted toll road operator Atlas Arteria to warn of softening revenues. The share price dipped 2.5 per cent.
IAG investors braced for a hit to the share price after the insurer announced a discounted capital raising. The company intends to raise up to $750 million against claims flowing from this week’s NSW court decision that exclusions in business policies did not cover Covid-19. Shares were in a halt.
Aside from BHP and ANZ, the biggest weights on the index at the heavyweight end were Aristocrat Leisure -1.8 per cent, Goodman Group -0.9 per cent and Macquarie Group -1 per cent. Newcrest fell 0.8 per cent and Telstra 0.3 per cent.
On Asian markets, China’s Shanghai Composite rose 0.1 per cent and Hong Kong’s Hang Seng 0.4 per cent. Japan’s Nikkei dropped 0.5 per cent.
Gold rebounded $5.40 or 0.3 per cent to $US1,866.90 an ounce. Brent crude edged up six cents or 0.1 per cent to $US44.26 a barrel.
The dollar climbed 0.4 per cent to 72.93 US cents.
Hot today and not today
Hot today: Gateway Mining (ASX:GML) was the best of the specs after boasting a new high-grade discovery at its Gidgee Gold Project. Reverse circulation drilling intersected a “substantial zone of strong gold mineralisation” in an area not previously tested. MD Peter Langworthy said the hits were a “major breakthrough” for the project. The explorer’s shares jumped 50 per cent to 2.7 cents.
Not today: Broker downgrades weighed heavily on Oil Search (ASX:OSH) following yesterday’s announcement the company was reactivating its $4 billion Alaskan oil project. JPMorgan Chase and Credit Suisse both reduced their ratings. Credit Suisse downgraded the energy company’s shares to ‘Underperform’ and cut its price target to $3.10. Shares fell as low as $3.35 before trimming their fall to 5.1 per cent at $3.54.