Australian shares pushed higher after US index futures overcame sharp initial losses as violent protests convulsed American cities.
The S&P/ASX 200 hit a four-session low before reversing to a mid-session gain of 54 points or almost 1 per cent.
The recovery mirrored a turnaround in US index futures as violent clashes between authorities and protesters continued following the death of George Floyd in police custody. S&P 500 index futures were recently up five points or 0.2 per cent after opening 0.7 per cent lower. Major retailers have been targeted during several nights of looting and vandalism. President Donald Trump reportedly spent an hour in a White House bunker on Friday night as protests raged nearby.
The morning's gains built on the Australian market's second best week of the year. The S&P/ASX 200 put on 259 points or 4.7 per cent last week as the big banks threw their weight behind the recovery effort.
Resource stocks provided much of the momentum after iron ore broke above US$100 a ton for the first time in ten months. Iron ore has been a standout performer during the pandemic, rising 11 per cent last week in large part due to Brazil's struggles to contain COVID-19. Media reports claim hundreds of employees working at Vale's ore mines have been infected. Here, Kimberley producer Fortescue jumped 4.1 per cent to a fresh all-time high. BHP gained 2.5 per cent and Rio Tinto 3.4 per cent.
The financial sector resumed its bull run following a brief blip on Friday. The sector rose 0.7 per cent as CBA gained 0.6 per cent, ANZ 1.5 per cent, NAB 1.6 per cent and Westpac 1.1 per cent.
A 3.7 per cent bounce in CSL helped lift the healthcare sector 2.4 per cent. Ramsay Health Care dipped 0.8 per cent.
The big two supermarkets were among the biggest drags on the index. Woolworths fell 0.8 per cent and Coles 0.9 per cent.
Star Entertainment climbed 4.2 per cent after announcing it will reopen its Sydney casino to NSW punters this afternoon. Rival Crown edged up 1.3 per cent. The rebranded ADBRI Limited (formerly Adelaide Brighton) was the index's best performer, rising 8.6 per cent. Close behind were Seven West Media, up 8.1 per cent, and travel agent Flight Centre, up 7.5 per cent.
The dollar burst through 67 cents to a three-month high. The Aussie was lately ahead 0.9 per cent at 67.28 US cents. The rise followed broadly positive domestic and Chinese economic news. AiG's manufacturing index rose to 41.6 last month from an April reading of 35.8. House prices declined 0.5 per cent, in line with expectations.
Asian markets rallied after May factory data for China topped expectations. Caixin's manufacturing PMI climbed to 50.7 from an April reading of 49.4. Economists had expected a milder improvement to around 49.6. China's Shanghai Composite climbed 1.4 per cent, Hong Kong's Hang Seng 3.1 per cent and Japan's Nikkei 1.2 per cent.
Brent crude fell 20 cents or 0.5 per cent this morning to $US37.64 a barrel. Gold rose $1.30 or 0.1 per cent to $US1,753 an ounce.
What's hot today and what's not:
Hot today: The challenging outlook for many small listed businesses was underlined by the decision by the board of OneVue Holdings (ASX:OVH) to recommend a takeover offer from Iress (ASX:IRE) at a level near where OVH shares traded in January. While the Iress offer of 40 cents a share represents a 66.7 premium to the last traded price, it's only just above the 36-38 cents range where shares traded before the pandemic bit. Anyone who got on board over the last two months will be happier than long-term investors: the share price gapped up 54.2 per cent to 37 cents. Iress entered a trading halt to raise capital for the acquisition.
Not today: Shopping centre groups came under pressure as Vicinity (ASX:VCX) tapped the market for $1.4 billion. SCA Property sagged 3.9 per cent, Stockland 2.8 per cent and Charter Hall Retail 1.8 per cent. Vicinity announced it was seeking $1.2 billion from institutional investors and up to $200 million from retail shareholders to strengthen its balance sheet. The company said it would not pay a distribution for this half after preliminary figures indicated its aggregate asset values had wilted by 11 - 13 per cent or $1.8 billion to $2.1 billion under the effects of COVID-19.