The share market was on course to round out its first monthly advance since January with further gains after Wall Street was boosted by progress towards a treatment for COVID-19.
The S&P/ASX 200 climbed 93 points or 1.7 per cent to 5486, positioning the index for its highest close in almost two weeks. Today’s gains extended a rally that has raised the index more than 400 points since the start of the month.
The mood on global markets turned sharply bullish overnight after White House health officials welcomed a successful trial of an antiviral for treating COVID-19 patients. The S&P 500 surged 76 points or 2.66 per cent.
Market sentiment was also helped by a strong quarterly earnings report from Google parent company Alphabet. However, well-received after-market updates this morning from Microsoft, Facebook and Tesla did not translate into major gains for index futures. While after-market gains for the three stocks ranged from 2.15 per cent for Microsoft to 10.5 per cent for Facebook, S&P 500 index futures were recently ahead six points or 0.2 per cent. Nasdaq futures were brighter, rising 54 points or 0.6 per cent.
Energy, tech and industrial stocks steered the Australian market higher. The energy sector advanced 3.4 per cent to a six-week high as oil extended strong overnight gains. The global benchmark, Brent crude, was last up $1.75 or 7.8 per cent at US$24.29 a barrel, extending an overnight gain of 10.2 per cent. The US benchmark rose $1.54 or 10.2 per cent this morning to US$16.59, extending a 22 per cent advance. Here, Oil Search rose 8.3 per cent, Caltex 7.6 per cent, Viva Energy 5.4 per cent, Santos 5.5 per cent and Woodside 4.5 per cent.
The ten largest tech companies by market capitalisation all recorded gains after the Nasdaq led the US rally. The morning’s best performers included Afterpay +6.6 per cent, Computershare +5.9 per cent and Appen +5.1 per cent. Advances among industrials included Sydney Airport up 4.1 per cent, Transurban up 3.6 per cent, Seek up 3.2 per cent and Qantas up 3.2 per cent.
A week of slashed or suspended dividends and increased provisions for bad loans has not stopped the financial sector from moving higher. CBA tacked on 1.8 per cent, NAB 4.4 per cent and Westpac 2.5 per cent. ANZ slipped 0.4 per cent after suspending its dividend and announcing a 60 per cent slump in profit as it set aside $1 billion for bad loans.
Andrew Forrest’s Fortescue Metals has regained almost all of its pandemic losses since Australia Day, jumping 3.8 per cent today after announcing a 10 per cent increase in iron ore shipments as Chinese demand remained strong. The report helped lift rival BHP 1.8 per cent and Rio Tinto 1.9 per cent. Gold stocks retreated after sector giant Newcrest suspended trade for a $1.1 billion capital raising.
Woolworths shrugged off early weakness, edging up 0.2 per cent after its third-quarter sales fell narrowly short of analysts’ expectations. The supermarket reported an increase of 10.3 per cent, shy of the 11.8 per cent market consensus and below growth at Coles of 13.1 per cent announced earlier in the week. Coles climbed 1.9 per cent.
Strong gains on Asian markets included a rise of 2.6 per cent on Japan’s Nikkei and 1.1 per centt on China’s Shanghai Composite. Trade in Hong Kong was suspended for Buddha’s birthday celebrations.
Gold rose $11.40 or 0.7 per cent to $US1,724.80 an ounce as a Federal Reserve pledge to keep interest rates low weighed on the greenback. The Australian dollar pared overnight gains, easing 0.2 per cent to 65.41 US cents.
What’s hot today and what’s not:
Hot today: Engineering and construction firm Decmil (ASX:DCG) put a squabble with the New Zealand prison system behind it, announcing its order book had been boosted by two new projects worth $36 million. The company’s share price crashed to a record low last month when the company announced the termination in acrimonious circumstances of a contract to provide modular accommodation to the NZ Department of Corrections. The share price recovery accelerated with the announcement this morning of deals in WA and Queensland that bulk up the order book to $411 million. DCG shares were last up 48.2 per cent.
Not today: A 24 per cent slump in gold sales and a 6 per cent decline in production took the shine off a month-long rebound in Aurelia Metals (ASX:AMI). The share price sagged 13.9 per cent this morning, erasing much of the share price recovery since the pandemic low on March 23. AMI said operations had been impacted by a temporary shaft outage and measures to prevent COVID-19. The company said it was unable to forecast production and costs for this quarter but it expected production to improve on the March quarter result.