A recovery in the big four banks helped the share market overcome sharp early losses as tax-loss selling appeared to kick in ahead of the financial-year end.
The S&P/ASX 200 fell as much as 62 points in the first hour of trade before reversing to a mid-session gain of 20 points or 0.3 per cent.
The run-down to the end of the financial year began on a soft note following a broad retreat in US stocks on Friday. The S&P 500 shed 18 points or 0.56 per cent after Apple announced it was reclosing stores in several US states where COVID-19 infections were rising.
The Australian market pared its fall as US stock futures reversed opening losses. Dow futures were last up 101 points or 0.4 per cent after being down almost 180 points. S&P 500 index futures climbed 14 points or 0.4 per cent.
A reversal in the big four banks helped swing the market into the black. After opening opened underwater, CBA had advanced 1.5 per cent by mid-session, ANZ 1.9 per cent, NAB 0.9 per cent and Westpac 1.3 per cent. Support from resource stocks included a 1.6 per cent rise in BHP and 1 percent in Rio Tinto.
Shipbuilder Austal was the local index’s best performer, rising 9.8 per cent on news the US Department of Defense will invest US$50 million in Austal’s shipbuilding and maintenance facility in Mobile, Alabama. James Hardie gained 6.2 per cent after lifting its earnings guidance, citing improvements in the US housing market over the last seven weeks.
Gold miners filled out the rest of the slots at the top of the index. Silver Lake Resource put on 5.9 per cent Saracen Mineral 5.3 per cent and St Barbara 5 per cent and. Newcrest added 3.8 per cent as the price of gold started a new week at a gallop. Gold surged $16.70 or 1 per cent in electronic trading to $US1,769.70 an ounce.
With just seven sessions left for investors to crystallise tax losses, companies whose business models have suffered under lockdowns and travel restrictions filled most of the index’s bottom slots. Corporate Travel Management sank 8 per cent, outdoor advertiser Ooh!Media 5 per cent, Webjet 4.5 per cent and Flight Centre 4.1 per cent.
The pre-earnings confession session produced its first high-profile victim as tech leader Altium announced it would miss analyst revenue expectations. The software company said discounting had helped drive growth, but revenue would take a hit from new lockdowns in China and the impact of COVID-19 spikes in parts of the US. The share price slumped 7.8 per cent.
Reserve Bank Governor Philip Lowe warned interest rates would likely remain near record lows for years to come. Mr Lowe said economic data had not been as bad as the central bank feared but the crisis would cast a shadow that “could last for years”. He dismissed the risk low interest rates would create a “zombie economy”, but called for government reforms to drive growth and encourage the take-up of new technologies.
A subdued morning on Asian markets saw China’s Shanghai Composite rise 0.4 per cent, Hong Kong’s Hang Seng dip 0.2 per cent and Japan’s Nikkei add 0.1 per cent.
Oil jagged higher in choppy trade. Brent crude rose 15 cents or 0.4 per cent this morning to $US42.34 a barrel.
The dollar rose 0.3 per cent to 68.52 US cents.
What’s hot today and what’s not:
Hot today: Investors in junior minerals explorer Cassini Resources (ASX:CZI) enjoyed a payday after gold giant Oz Minerals launched a friendly takeover to mop up the 30 per cent of the West Musgrave nickel-copper joint project in WA it does not already own. The two companies have been involved in developing the project since 2016 when Oz took a 70 per cent interest. The offer gives Cassini shareholders a stake in Oz Minerals, a cash payout and shares in a new company to be called Caspin Resources that will house Cassini’s other projects. CZI shares jumped 28 per cent to 16 cents. OZL shares edged up 0.5 per cent.
Not today: Investment manager VGI Partners slid to a two-and-half-month low on news star stock-picker Douglas Tynan was standing down from executive duties. Tynan has been involved with the hedge fund for 12 years, most recently as Head of Research and Executive Director. He will continue as a non-executive director. The share price eased 9.8 per cent to $8.38.