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The Australian share market cracked 7200 for the first time before retreating as the big four banks rolled over.
A flurry of end-of-month institutional buying helped the S&P/ASX 200 briefly eclipse last year’s intraday record by six points. The benchmark rose as high as 7203.3 before fading to a mid-session loss of six points or 0.1 per cent at 7173.
Advances in Newcrest, CSL and Fortescue Metals helped cushion the index against declines in BHP, Woodside Petroleum and the banking giants.
What’s driving the market
Today’s peak represented the final milestone in the long recovery from last year’s Covid-fuelled market collapse. The ASX 200 plunged almost 2,800 points in five harrowing weeks from late February to late March 2020. The damage has taken 14 months to repair.
Traders who picked the market low have seen gains of more than 60 per cent, thanks to record-low interest rates, government spending and an unexpectedly strong rebound in the economy and corporate earnings.
The ASX 200 has risen for 13 of the 14 months since the low. Today’s rally kept the index on track for a monthly gain of around 2.2 per cent. End-of-month buying ensured volumes remained healthy despite market holidays in the US and UK tonight.
US stocks wrapped up a positive month with slender gains on Friday. The S&P 500 inched up 0.08 per cent ahead of the Memorial Day long weekend. The US benchmark gained 1.2 per cent for the week and 0.6 per cent during a month dominated by fears about inflation and volatility in cryptocurrencies.
The morning’s economic data showed the pace of Chinese manufacturing cooled a fraction this month. The China Federation of Logistics and Purchasing PMI dipped to 51 from 51.1 last month. A measure of services activity increased to 55.2 from 54.9. Readings above 50 indicate expanding activity.
Going up
A patternless session for the heavyweight miners saw some rise, some fall. Newcrest put on 0.87 per cent, Fortescue Metals 0.81 per cent and Rio Tinto 0.61 per cent. BHP eased 0.37 per cent. South32 shed 0.5 per cent.
The morning’s prime movers beyond the mining space were CSL +0.83 per cent, Telstra +0.72 per cent and Goodman +0.62 per cent. Supermarket Coles put on 0.48 per cent. Macquarie Group gained 0.28 per cent. Wesfarmers added 0.05 per cent.
Property giant Dexus edged up 0.77 per cent after announcing it expects to distribute 3 per cent more per security for the full year than previously indicated.
“Today’s upgrade is a result of better-than-expected outcomes across the underlying property portfolio, as well as delayed settlements for asset sales and other initiatives across the business,” CEO Darren Steinberg said.
Going down
Woodside fell 0.95 per cent as oil producers retreated ahead of tomorrow night’s OPEC+ oil cartel meeting. Santos declined 1.38 per cent, Oil Search 2.69 per cent and Beach Energy 1.18 per cent.
The big four banks led the mid-morning reversal. NAB faded 0.52 per cent, CBA 0.48 per cent, ANZ 0.42 per cent and Westpac 0.28 per cent. Pokie-maker Aristocrat Leisure eased 1.72 per cent from Friday’s record close.
A downgraded forecast drove Nuix to fresh lows. Shares in the data analytics firm sank 18.1 per cent after the company warned it expected to miss full-year revenue and annualised contract value forecasts issued as recently as last month. Today’s news was the latest in a series of setbacks since the company listed in December.
“There’s a near-term level of uncertainty regarding the precise timing, shape and scope of some large and anticipated customer contracts coming to fruition in the next few weeks,” CEO Rod Vawdrey said. “We expect to capture most of the revenue which remains under current negotiation with these customers either by financial year-end or early in our new financial year. We remain confident in the long-term outlook for the company.”
BetMakers fell heavily for a second session since announcing a bid for Tabcorp’s media and wagering business. Shares in the company fell 13.43 per cent to a six-week low.
Link Administration Holdings eased 4.86 per cent on news the firm and other stakeholders will float the PEXA real estate settlements platform, rather than pursue a sale. Link said its board concluded it was in shareholders’ best interests to retain an interest in PEXA. Link has a 44 per cent stake in the platform.
Beleaguered infant formula firm A2 Milk dropped 0.9 per cent following media reports of a possible class action. The company said it was “not aware of any legal proceeding having been filed at this time”. Managing Director David Bortolussi said the company had complied with its disclosure obligations. The share price hit a three-and-a-half-year low earlier this month.
Property ad business REA Group faded 0.47 per cent back on news it will merge its Malaysia and Thailand businesses into PropertyGuru in exchange for an 18 per cent stake in the Asian marketplace and a seat on the board.
REA Group CEO Owen Wilson said, “This transaction presents a unique opportunity to create the most compelling digital property classifieds company in Southeast Asia.”
Other markets
A soft session on Asian markets saw the Asia Dow decline 0.03 per cent, China’s Shanghai Composite 0.2 per cent, Hong Kong’s Hang Seng 0.28 per cent and Japan’s Nikkei 0.72 per cent.
S&P 500 futures rallied five points or 0.11 per cent over the Memorial Day long weekend.
Oil reversed some of Friday’s 48-cent loss. Brent crude bounced 18 cents or 0.26 per cent to US$68.90 a barrel.
Gold added to Friday’s gains, rising $6.30 or 0.33 per cent to US$1,911.90 an ounce.
The dollar improved 0.24 per cent to 77.26 US cents.
