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A fresh wave of vaccine optimism lifted the share market to within 40 points of its 2020 starting point as investors positioned for life after Covid-19.

The prospect of effective vaccines next year helped raise the S&P/ASX 200 to its highest point since late February. The index climbed 68 points or 1 per cent to 6630 by mid-session, peaking 0.6 per cent off its January 1 opening price.  

What’s driving the market

US stocks rallied after AstraZeneca and the University of Oxford announced their experimental vaccine was up to 90 per cent effective in preventing Covid in a late-stage trial. The collaboration was the third in two weeks to announce promising results. The AZ/UoO vaccine may have cost and transportation advantages.

The Dow Jones Industrial Average put on 1.12 per cent on gains in value stocks hit hardest by the pandemic. The S&P 500 added 0.56 per cent.

The rally was “led by the previously out of favour industrials, airlines and other travel related stocks and financials, seen as relative beneficiaries of the successful deployment of vaccines next year,” according to NAB Senior Economist David de Garis.

Trading patterns were similar here, aided by news Queensland will lift its blockade on Greater Sydney. Travel stocks, banks, industrials, energy and other sectors that thrive in a vibrant economy mostly advanced. Defensive stocks sold off. Goldminers were hit particularly hard.

US index futures rallied on news the transition between President-elect Joe Biden and President Donald Trump had formally begun. Today’s development was interpreted as a sign Trump had resigned himself to losing the White House. S&P 500 futures advanced 16 points or 0.5 per cent.

Going up

Winners significantly outweighed losers as the post-pandemic repair work continued. Four-fifths of the heavyweights of the ASX 20 advanced, led by BHP +2.9 per cent and ANZ +2.9 per cent.

All four major banks reached their highest points since March. Westpac gained 2.8 per cent, NAB 2.2 per cent and CBA 1.4 per cent.

Energy stocks had another strong session. Beach Energy surged 8.5 per cent, Origin Energy 4.4 per cent, Santos 2.9 per cent and Woodside 2.6 per cent.

Shopping centre operators and travel and tourism stocks outperformed. Unibail-Rodamco-Westfield put on 6.7 per cent, Qantas 3.2 per cent and Webjet 3.1 per cent.

A stellar week for investors in Mesoblast continued with a third day of gains as the biopharmaceutical updated investors at its virtual AGM. The company’s shares rose 4.9 per cent, briefly extending this week’s gains beyond 50 per cent.

Generic medicine manufacturer Mayne Pharma gained 0.7 per cent despite warning unfavourable currency movements and soft sales helped drag revenue for the first four months of the financial year down 9 per cent.

Going down

Gold was the biggest loser from a risk-on session in the US and gains in the greenback. Gold for December delivery settled $36.40 or 1.8 per cent lower at US$1,837.80 an ounce overnight. The yellow metal fell another $12.30 this morning to US$1,825.50.

An index of local goldminers tumbled 5.5 per cent to a level last seen in May. Silver Lake Resource shed 7.5 per cent, Northern Star 6.9 per cent and Saracen Mineral 6.9 per cent. Sector giant Newcrest lost 4.5 per cent.

Besides Newcrest, other market heavyweights to miss the uplift included toll road operator Transurban -1.1 per cent, Macquarie Group -0.2 per cent and Woolworths -0.1 per cent.

Other markets

Japan’s Nikkei was the pick of the major Asian markets, rising 2.6 per cent. China’s Shanghai Composite dipped 0.3 per cent. Hong Kong’s Hang Seng gained 0.2 per cent.

Oil retreated from its highest level since March. Brent crude eased six cents or 0.1 per cent to $US45.98 a barrel.

The dollar edged up 0.15 per cent to 73.06 US cents.

What’s hot today and what’s not

Hot today: Blockchain specialist DigitalX (ASX:DCC) hit a two-year high after launching a blockchain app to help listed companies with regulatory obligations. The Drawbridge app is intended to reduce corporate governance risks and insider trading by digitising compliance. The company – viewed by some investors as the closest thing the ASX offers to a proxy for Bitcoin – has tripled in value since October. The share price rallied 21.1 per cent today to 11.5 cents.

Not today: Investors were quick to take profits after Conico (ASX:CNJ) released the results of its first four weeks in the field at its lead-zinc-silver project in Greenland. The company collected surface samples and gravity-borne data to help identify drilling targets for next year. Shares that had doubled in a month fell 17.8 per cent.  

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