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Australian shares rose to a two-week high as investors weighed positive overnight leads against the impact of bushfires and the coronavirus on company earnings.
The ASX 200 advanced 51 points or 0.7 per cent to 7063, the index’s highest level since before Australia Day.
The rally followed a positive session on Wall Street, where the S&P 500 climbed 24 points or 0.73 per cent to a record close. Market sentiment was boosted by news that several Chinese factories producing American goods re-opened yesterday following an extended break to help contain the coronavirus epidemic.
A broad rally here saw all 11 sectors advance. Telecommunications and technology stocks led, while resource stocks trailled. Telstra rose 2.1 per cent to bring a six-moth closing high within reach. A record close on the Nasdaq helped lift the WAAAX group of tech leaders. Wisetech put on 2.7 per cent, Appen 3.4 per cent, Afterpay 1.5 per cent, Altium 0.1 per cent and Xero 2 per cent..
The market shrugged off a mixed batch of profit results and a profit warning from Cochlear. Shares in the hearing implant specialist sank as low as $232 before rebounding to $239.15 after the company cut its earnings guidance because of delays in surgeries in Asia due to the coronavirus.
Shares in Suncorp touched their weakest point since 2016 on news of a 6.2 per cent drop in half-year after-tax profits after the company invested in additional reinsurance cover to help with payouts for bushfires and other natural disasters. Toll road network Transurban rose 1.3 per cent to an all-time peak after announcing an 8.6 per cent lift in half-year toll revenue to $1.4 billion.
The big four banks all rose between 0.7 and 1 per cent. Resource stocks were held back by on-going weakness in hard commodities amid questions over Chinese demand. BHP and Rio Tinto edged up 0.1 per cent, Fortescue 0.9 per cent.
At the speculative end of the market, the recent rally in companies positioned as profiting from the coronavirus outbreak showed signs of fatigue. Biotron sank 7.8 per cent, Zoono Group 6.7 per cent and Uscom 9.4 per cent. Holista CollTech rose 10.7 per cent after using its recent share price strength to raise funds through a placement.
Business confidence edged up last month from six-year lows but remained weak. NAB’s confidence index improved one point to -1.
“While there has been no significant deterioration, in overall terms the survey continues to suggest very little to no growth in the private sector,” NAB Chief Economist Alan Oster said.
China’s Shanghai Composite opened unchanged. Hong Kong’s
Hang Seng rallied 0.93 per cent. Trade in Japan was suspended for a public
holiday. S&P 500 index futures climbed seven points or 0.2 per cent.
Brent crude bounced 62 cents or 1.2 per
cent this morning to $US53.90 a barrel. Gold
retreated $5 or 0.3 per cent to $US1,574.50 an ounce.
The dollar edged up 0.21 per cent to 67 US cents.
What’s hot today and what’s not:
Hot today: News of a big increase in assets under management lifted shares Challenger Group (ASX:CGF) to a 14-month high. The investment manager announced assets under management increased by 10 per cent over the final six months of last year to $86 billion, boosting statutory net profit after tax to $220 million. CEO Richard Howes said the result set the company on track to meet full-year guidance at the top end of the range of $500 – $550 million. CGF shares jumped 12.2 per cent to $9.95.
Not today: Oil and gas company Beach Energy (ASX:BPT) slipped after lowering its full-year production guidance and raising its expected expenditure. While the company spruiked a “strong” half-year underlying net profit after tax of $274 million, investors were more interested in news that capital expenditure will rise to $875 – $950 million from previous of guidance of $750 – $850 million, and that production will be modestly lower at 27 – 28 million barrels a day, versus 27 – 29. Shares were marked down 3.8 per cent.
