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It was another day of fresh records for the ASX as local economic reports distracted investors from overseas concerns.
Still, Wall Street closed green overnight and set the local share market up for success. A continuing downward trend in Covid-19 coronavirus infections has started to improve global sentiment while China keeps working to cushion the economic blow of the epidemic.
Down under, the monthly jobs report showed a spike in jobseekers which sent the unemployment rate to 5.3 per cent compared to 5.1 per cent last month. This seems like bad news, but it was largely the reason the ASX surged ahead today.
The unexpected increase in the unemployment rate sent the Australian dollar to its lowest level in a decade. A weaker currency generally favours the local stock market, which relies heavily on exports.
Further, the higher level of unemployment increases the likelihood of another upcoming Reserve Bank of Australia cash rate cut. Again, lower interest rates generally tend to bode well for the ASX.
As such, our benchmark ASX 200 index tacked on 17.90 points or 0.25 per cent today, closing at a fresh record high of 7162.50 total points.
Consumer stocks led the charge today as our supermarket giants took back some of yesterday’s lost ground. Woolworths gained 0.16 per cent and Coles 0.69 per cent. Meanwhile, retail conglomerate Wesfarmers hit another fresh record on the back of yesterday’s financial report, today gaining 0.84 per cent to $46.94 per share.
Coca-Cola Amatil, however, outperformed the sector today, rising 8.55 per cent and proving to be one of the day’s top picks with reporting season in full swing.
On the inverse, tech stocks continued their heavy decline. Computershare did its best to cling to a 1.16 per cent gain, but Xero lost 1.71 per cent and Afterpay lost 3.06 per cent. Wisetech continued to nosedive off of yesterday’s earnings downgrade and today lost another 11.78 per cent. Since market close on Tuesday afternoon, Wisetech has shaved off over 35 per cent of its share price.
The finance sector closed green, prodded along by our big banks. ANZ was the best performer, gaining 1.01 per cent, while NAB gained 0.33 per cent and Westpac 0.27 per cent. Commonwealth Bank had a rollercoaster day but closed a slight 0.023 per cent green.
It was a similar story for the other pillar of our stock market, the materials sector. While BHP gained 0.052 per cent, Rio Tinto 0.051 per cent, and Fortescue a healthy 1.80 per cent, Amcor and James Hardie lost 0.32 per cent and 1.30 per cent, respectively.
Interestingly, health care stocks underperformed today. Each time it seems the spread of Covid-19 might be abating, the sector takes a dip as punters lose confidence in their pick of the race for a cure. Today, biotech giant CSL declined 0.68 per cent and Cochlear 3.66 per cent.
Overseas, Asian markets were mixed despite the positive coronavirus news. When the ASX closed for the day, the Asia Dow was down 0.32 per cent and Hong Kong’s Hang Seng was down 0.81 per cent. Meanwhile, Japan’s Nikkei 225 was 0.28 per cent up and the Shanghai Composite 0.47 per cent up.
With the Aussie dollar’s heavy decline today, overseas currencies are more expensive. Currently, one dollar buys 66.48 US cents, 51.48 pence, and 10.01 South African Rand.
