Rallies in oil and US index futures helped the Australian share market kick higher for the third time in four sessions.
The S&P/ASX 200 climbed 67 points or 1.3 per cent to 5379 by the halfway mark as a surging oil price lifted energy stocks, and the financial sector gained for the first time in five sessions.
US index futures tracked the rally in crude. S&P 500 index futures rose 28 points or 1 per cent as West Texas Intermediate climbed $1.74 or 14.1 per cent to $US14.03 a barrel. Brent crude advanced 76 cents or 3.7 per cent to $US21.21. Also helping market sentiment in the US was a well-received profit report from index heavyweight Alphabet this morning.
The Australian energy sector enjoyed its best session in weeks, rising 5.6 per cent as project manager Worley gained 8.7 per cent, Oil Search 8.1 per cent, Woodside 6.7 per cent and Santos 6.6 per cent. The recovery in crude followed overnight news that an oil tanker was blown up by a bomb in Syria yesterday.
The financial sector gained traction following a soft start to the week after NAB and Westpac announced substantial provisions for bad debts as the coronavirus crushes the economy. The sector added 3.4 per cent as NAB jumped 5.4 per cent, Westpac 4.6 per cent, CBA 3.8 per cent and ANZ 5.8 per cent.
BHP added bulk to the rally, climbing 2 per cent to its highest level in more than a week. Fortescue advanced 2.6 per cent to a three-week peak. Rio Tinto dipped 0.6 per cent.
Coles was among the biggest drags on the market after releasing quarterly earnings. The supermarket’s shares sagged 4.8 per cent despite a 13 per cent hike in sales over the first three months of the year. The company warned overheads will increase this quarter as the supermarket employs more staff, invests in additional cleaning and security and faces lingering cost pressures from drought and bushfires. Rival Woolworths caught some collateral damage, falling 2.4 per cent.
Hearing implant specialist Cochlear dipped 1.3 per cent after increasing its retail share offering to $220 million to supplement $880 million raised from institutions. Stock offered at $140 through the share purchase plan traded above $180 this morning. Builder Lendlease surged 5.1 per cent as trade resumed following the completion of a $950 million institutional rising. The company intends to raise another $200 million from retail shareholders. Shares in receivables company Credit Corp went into a halt after it announced it would seek $150 million to strengthen the balance sheet.
James Packer’s Crown Resorts jumped 7.9 per cent on news private equity firm Blackstone have taken a significant stake in the casino group. Blackstone picked up just under 10 per cent of Crown’s listed shares from Melco Resorts for around $550 million. The change in ownership ends Hong Kong-based Melco’s tilt at a takeover of Crown.
China’s Shanghai Composite per cent gained 0.7 per cent and Hong Kong’s Hang Seng 0.4 per cent. Trade in Japan was suspended for a public holiday.
Gold improved $3.30 or 0.2 per cent this morning to $US1,725.50 an ounce.
The dollar climbed 0.6 per cent to 65.28 US cents. The Aussie has bounced more than 10 cents since its COVID-19 low in mid-March.
What’s hot today and what’s not:
Hot today: A turnaround strategy at Go 2 People (ASX:GO2) has delivered results for shareholders in the recruiter and project manager. The share price surged 182.4 per cent after the company announced it had achieved back-to-back cashflow-positive quarters for the first time since listing. A restructure in the first quarter of the financial year saw the company pivot towards high-margin clients to increase profitability. While Q3 receipts declined from the December quarter, costs also fell, lifting year-to-date operating cashflow to a positive $2.48 million.
Not today: Gold explorers Kalamazoo Resources (ASX:KZR) and Xantippe Resources (ASX:XTC) felt the wrath of disappointed shareholders after releasing drill results this morning. Kalamazoo shed 24.5 per cent of its value after CEO and Chairman Luke Reinehr said the Mustang prospect at its Castlemaine Gold Project near Bendigo had not met expectations despite promising initial results. Xantippe dropped 25 per cent following underwhelming results from its Southern Cross gold project in WA.