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A burst of Covid-19 optimism helped the share market rise for a second session after New South Wales passed a vaccination milestone, the US regulator granted Pfizer’s vaccine final approval and China reported zero new cases.
The S&P/ASX 200 climbed 13 points or 0.17 per cent. Travel and tourism stocks spearheaded gains.
Oil companies rebounded on crude’s first rise in eight sessions. Mining giants BHP and Rio Tinto shrugged off a dip in iron ore.
The last full week of reporting season brought big wins for Nanosonics, Uniti and Scentre Group, as well as heavy falls for Kogan, Monadelphous and Ansell.
What moved the market
Gloom over the economic impact of the delta variant lifted amid a string of positive developments. The US Food and Drug Administration gave full approval to the Pfizer-BioNTech vaccine, the first to advance from emergency use authorisation.
“The public can be very confident that this vaccine meets the high standards for safety, effectiveness, and manufacturing quality the FDA requires of an approved product,” Acting FDA Commissioner Janet Woodcock said. “While millions of people have already safely received COVID-19 vaccines, we recognize that for some, the FDA approval of a vaccine may now instill additional confidence to get vaccinated.”
China announced no new locally-transmitted Covid cases for the first time since July. The announcement offered hope that the highly-transmissible delta variant can be contained. More than 1,200 Chinese were infected during the latest outbreak.
New South Wales announced authorities had administered six million doses of vaccines, the government’s initial target for loosening some restrictions. Premier Gladys Berejiklian said she would announce additional freedoms for fully-vaccinated citizens later this week. The state reported 753 new local cases, down from 818 on Monday.
Travel and tourism stocks were the session’s big winners. Flight Centre jumped 6.66 per cent, Webjet 6.48 per cent, Qantas 5.48 per cent and Corporate Travel Management 4.24 per cent. Casino groups Star and Crown advanced 5.82 and 2.91 per cent, respectively.
Energy stocks rebounded from a nine-month low after crude broke a run of seven straight declines. Woodside Petroleum climbed 3.2 per cent, Beach Energy 3.32 per cent and Santos 3.19 per cent.
Overnight, US stocks rallied on the vaccine news. The S&P 500 hit an intraday record before ending 0.85 per cent ahead. The Nasdaq Composite jumped 1.55 per cent to an all-time closing high.
Winners’ circle
The tech sector touched a new six-month peak as borrowing costs laboured near six-month lows. Nuix gained 2.26 per cent, Nearmap 1.9 per cent and Afterpay 1.58 per cent.
The heavyweight miners shrugged off another dip in iron ore. Rio Tinto put on 1.32 per cent, Fortescue Metals 1.39 per cent, Newcrest 1.24 per cent and BHP 1.03 per cent.
A strong rebound in its infection prevention business and a recovery in ultrasounds fired Nanosonics up 21.9 per cent to a six-month high. Shares surged on news revenues improved 39 per cent over the second half to $60 million.
Uniti climbed 8.4 per cent to an all-time high after beating earnings expectations and announcing a share buyback. Full-year earnings more than tripled to $93.7 million.
Westfield mall operator Scentre Group rose 6.67 per cent on a rebound in rent collection as foot traffic improved. The company collected $1.2 billion gross rent over the first six months of the year, up 37 per cent from the first half of last year. Investors will receive a distribution of seven cents per security after half-year operating profit rose to $460.1 million.
A return to profit lifted PNG-focused Oil Search 2.97 per cent. The energy giant swung to a first-half profit of $139 million from a net loss of $266.2 million over the same period last year when crude prices were crashing. The company is in negotiations with Santos to form one of the largest energy firms in the world.
A 21 per cent increase in interim dividend to 3.4 US cents helped lift Alumina 1.82 per cent. The aluminium refiner reported a half-year net profit of US$73.6 million following six months of record bauxite and alumina output.
Aged care provider Estia Health reinstated its dividend after eking out a $6 million full-year net profit following “one of the most challenging periods the sector has ever faced”. Government funding and grants helped cushion the impact of Covid costs. The share price rose 3.57 per cent.
Among other companies reporting, Spark Infrastructure put on 0.35 per cent, Monash IVF 3.66 per cent, HUB24 7.43 per cent and Pepper Money 7.69 per cent.
Western Areas declined 3.8 per cent, McMillan Shakespeare 8.67 per cent, Austal 13.15 per cent, Perenti Global 5.85 per cent and Viva Energy 0.51 per cent.
Doghouse
An 86.5 per cent dive in full-year net profit to $3.5 million pulled Kogan down 15.77 per cent. The result reflected increased costs due to supply chain interruptions, over-stocking and marketing to shift excess inventory. Gross profit improved 61 per cent to $203.7 million and revenue by 56.8 per cent to $780.7 million.
Ansell sank 9.19 per cent as increasing costs and the threat of supply disruptions overshadowed record sales and a 48.5 per cent jump in full-year profit. The personal protective equipment manufacturer’s capital expenditure increased 36.5 per cent to $82.7 million to meet a Covid-fuelled jump in demand. The company expects demand for gloves and chemical body protection to soften this financial year.
Takeover target Boral fell 5.55 per cent after warning lockdowns were impacting costs and volumes. The construction materials supplier said the Greater Sydney lockdown threatened to cost $50 million in lost earnings in the first quarter alone. The company declared a full-year statutory net profit of $640 million.
Monadelphous sagged 14.42 per cent after a profit miss as the engineering group struggles to find skilled workers. The firm declared a full-year net profit of $47.1 million, short of the $55 million consensus. International border closures and strong demand have squeezed labour markets.
Online jobs marketplace Seek reinstated its full-year dividend after returning to profit. The company reported a net profit of $140.8 million, versus a loss of $88.9 million in FY20. Shareholders will receive a final dividend of 20 cents per share. The share price dipped 0.67 per cent.
Other markets
A second day of solid gains on Asian markets lifted US futures. The Asia Dow climbed 1.27 per cent, China’s Shanghai Composite 1.18 per cent, Hong Kong’s Hang Seng 2.01 per cent and Japan’s Nikkei 1.04 per cent.
S&P 500 futures rose nine points or 0.2 per cent.
Oil added to a 5.5 per cent overnight rebound. Brent crude climbed 35 US cents or 0.5 per cent to US$69.10 a barrel.
Gold eased 50 US cents or 0.03 per cent to US$1,805.80 an ounce.
The dollar firmed above 72 US cents, rising 0.35 per cent 72.33 to US cents.
