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Aussie shares rose for a second day after Chinese stimulus measures helped a global market rebound gather momentum overnight.
The ASX 200 briefly regained the 7000 level before paring its gain to 27 points or 0.4 per cent at 6976. At its peak this morning, the index had bounced more than 80 points in two sessions since a heavy tumble on Monday triggered by fears of the impact of the coronavirus epidemic on in-bound tourism and demand for Australian produce and resources.
The mood on global markets improved overnight as Chinese authorities injected cash into the economy for a second day to help companies ride out the virus. The S&P 500 rose 49 points or 1.5 per cent, regaining all of Friday’s sharp losses.
Asian markets picked up where yesterday’s tentative rebound finished. China’s Shanghai Composite climbed 0.52 per cent, Hong Kong’s Hang Seng 0.45 per cent and Japan’s Nikkei 0.79 per cent. S&P 500 index futures drifted seven points or 0.2 per cent.
The local tech sector took its cues from a record close on the Nasdaq in the US, rising 1.5 per cent to its own all-time high. Four of the five WAAAX group of leaders made gains, led by Wisetech, up 7 per cent. Appen put on 5.5 per cent, Altium 2.1 per cent and Xero 0.4 per cent. Afterpay eased 2.4 per cent from yesterday’s record.
Construction and engineering giant Cimic was one of the index’s best performers, surging 8.2 per cent despite declaring a $1 billion net loss. Investors looked beyond a one-off $1.8 billion write-down as the company exited the Middle East, focussing instead on $18 billion of new work and work in hand of $37.5 billion.
CSL‘s seemingly inexorable rise continued with a 1.2 per cent advance and a new record after the biotech giant told reporters it was talking to “various institutions” about a role in the search for treatments for the coronavirus. Junior contenders claiming skin in the game took a breather this morning. Zoono Group eased 7.7 per cent and Biotron 5.8 per cent.
Lithium miners were the index’s best performers after electric car-maker Tesla went parabolic and the UK government lowered its phase-out date for the sale of new fossil-fuel vehicles to 2035. Galaxy Resources soared 14.6 per cent, Syrah Resources 12.5 per cent, Pilbara Mining 11.3 per cent and Orocobre 12.1 per cent.
Iron ore miners rebounded with the price of the red dirt. BHP bounced 1.4 per cent, Rio Tinto 0.7 per cent and Fortescue 0.5 per cent. Overnight, the spot ore price rose $3.25 or 4.1 per cent to $US83.05 a dry ton.
Brent crude bounced 39 cents or 0.7 per cent from a one-year low this morning to $US54.35 a barrel. Gold rallied $4.10 or 0.26 per cent to $US1,559.60 an ounce.
The dollar retreated 0.03 per cent to 67.35 US cents.
What’s hot today and what’s not:
Hot today: the market capitalisation of Elixir Energy (ASX: EXR) more than doubled after the miner announced it had intersected rich seams of gas-producing coal at its prospect in China’s South Gobi Desert. Shares jumped two cents or 105.3 per cent to 3.9 cents on news of the strike. The company aims to extract natural gas from the coalbeds and connect to the East-West pipeline 410 km away. Managing Director Neil Young said: “We are very excited with the results to date from the Nomgon-1 well, which has met our key strategic objective of intersecting very thick and visually good quality coals.”
Not today: housing lender Gemworth Mortgage Insurance (ASX: GMA) went into sharp reverse despite reporting a 59 per cent increase in statutory net profit after tax. Shares that jumped ahead of today’s full-year result fell 4.9 per cent as underlying profit crept up a more modest $3.1 million to $97 million as the housing market emerged from the doldrums. The company predicted net earned premium this year will be within five per cent either side of last year’s figure.
