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The share market hovered near record levels as a strong end to the US trading week helped offset news of a regulatory crackdown and a spike in Covid cases.
The S&P/ASX 200 hit a fourth straight all-time high before easing to a mid-session loss of six points or 0.1 per cent.
Gains in mining and technology stocks helped counter declines in the big banks. Software firm Altium soared 35 per cent after rejecting a takeover offer from US multinational Autodesk.
NAB and several casino stocks fell after the federal financial intelligence agency AUSTRAC unveiled investigations into a string of alleged compliance failures.
What’s driving the market
Growth stocks rallied as Australian yields followed US counterparts lower. The tech sector climbed 2.5 per cent. Nuix bounced 6.56 per cent off Friday’s record low. Appen jumped 4.82 per cent, Afterpay 1.93 per cent and Megaport 2.91 per cent. The yield on ten-year Australian government bond yields dived almost six basis points.
Shares in Altium jumped 35.1 per cent from $27.21 on Friday to a high of $38.26 after the company revealed an unsolicited non-binding indicative offer of $38.50 a share from Autodesk. The company said the offer undervalued its prospects. Goldman Sachs will act as financial adviser.
Hansen Technologies rose 21.81 per cent on news of an unsolicited non-binding offer from BGH Capital valuing the software company at $1.3 billion.
US yields receded on Friday after soft jobs data soothed concerns the Federal Reserve would be forced to cut stimulus spending and raise rates sooner than the market expected. The S&P 500 rose 0.88 per cent to within 0.2 per cent of a record. The growth-stock-heavy Nasdaq Composite jumped 1.47 per cent.
Souring US futures helped drag the ASX off its early peak. S&P 500 futures declined five points or 0.12 per cent.
Also pressuring the market was news job advertising surged 7.9 per cent last month to its highest since 2008. The scale of the increase underlined pressures on labour markets and wages as the economy rebounds.
NAB, Crown Resorts, SkyCity Entertainment and The Star Entertainment Group retreated after AUSTRAC told all four companies it had identified concerns over compliance with anti-money laundering and counter-terrorism financing legislation.
The agency said it had not yet made any decision on enforcement action. NAB said options available to the agency included civil penalty orders, enforceable undertakings, infringement notices and remedial actions. All four companies said they would cooperate with the investigations.
NAB CEO Ross McEwan said, “We are very aware that we need to further improve our performance in relation to these matters. We have been working to improve and clearly have more to do.”
NAB shares slid 3.34 per cent. Crown lost 1.5 per cent, SkyCity 7.35 per cent and Star Entertainment 3.02 per cent.
Victoria reported 11 new locally-acquired cases of coronavirus, lifting its current outbreak to around 80 active local cases. The federal government announced the state will receive an extra 100,000 doses of the Pfizer vaccine in the next month.
Going up
The major iron ore producers rebounded from last week’s late setbacks following a Friday recovery in industrial metals as the US dollar declined. Rio Tinto climbed 1.73 per cent, BHP 1.23 per cent and Fortescue Metals 0.57 per cent.
A rise in gold on Friday helped lift Newcrest 0.58 per cent, Regis 2.49 per cent, Ramelius 2.36 per cent and Silver Lake Resources 2.31 per cent.
Centuria Industrial REIT (CIP) rallied 3.6 per cent on news the trust will be added to a closely-followed European REIT index.
“CIP’s inclusion in the FTSE EPRA Nareit Global Index follows the growth of the REIT’s size, revenue, value and liquidity,” Jesse Curtis, CIP Fund Manager, said. “We welcome this index inclusion that offers domestic and international investors with another transparent and efficient means for comparing CIP to global real estate peers.”
Shipbuilder Austal advanced 4.24 per cent after securing a US$3.6 million contract to design a new towing, salvage and rescue ship for the US Navy.
Aged care operator Japara Healthcare climbed 5.83 per cent to $1.18 after suitor Little Company of Mary Health Care (also known as Calvary) sweetened its takeover offer to $1.20 per share. Japara said it would allow Calvary to carry out due diligence with a view to firming up its indicative offer.
The energy sector rose for a fifth straight session, following a fresh two-year high in crude. Santos climbed 1.04 per cent, Beach Energy 2.2 per cent and Oil Search 0.85 per cent. Woodside inched up 0.08 per cent.
Scientific instruments manufacturer Trajan rose 13.53 per cent upon listing this morning. Shares that listed at $1.70 rose as high as $2.04 before trimming their advance to $1.93.
Going down
The rate-sensitive banking sector retreated with bond yields. ANZ sank 1.58 per cent, CBA 0.82 per cent and Westpac 0.82 per cent. Macquarie Group shed 0.55 per cent.
Friday’s decline in the greenback crimped companies with significant US earnings. Aristocrat Leisure eased 1.1 per cent, Transurban 0.1 per cent and ResMed 0.11 per cent. CSL firmed 0.3 per cent.
Telstra pulled back 0.7 per cent from Friday’s 14-month high. Wesfarmers dipped 0.63 per cent.
Travel and tourism stocks weathered initial news of Victoria’s Covid outbreak, but succumbed to selling after this morning’s data raised questions about the length of the lockdown. Corporate Travel Management fell 4 per cent, Webjet 3.58 per cent, Flight Centre 3.82 per cent and Qantas 2.16 per cent.
FOS Capital made an inauspicious start to life on the boards, falling 14 per cent upon listing. The company manufactures indoor and outdoor lighting.
Other markets
A patternless morning on Asian markets saw the Asia Dow slump 0.35 per cent and Hong Kong’s Hang Seng shed 0.67 per cent. China’s Shanghai Composite gained 0.19 per cent. Japan’s Nikkei added 0.14 per cent.
Oil retreated from two-year highs. Brent crude slid 22 cents or 0.31 per cent to US$71.67 a barrel.
Gold eased $2.60 or 0.14 per cent to US$1,889.40 an ounce.
The dollar faded 0.05 per cent to 77.36 US cents.
