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Australian shares rallied for the fifth time in six sessions as investors sifted through a slew of earning updates following a record close for the Dow.

The S&P/ASX 200 hovered near break-even for much of the morning before launching to a mid-session gain of 23 points or 0.31 per cent. The Australian benchmark closed at a four-week high yesterday.

Gold miners and property companies were among the best-performers. Consumer stocks declined.

What’s driving the market

A dip in US equity futures put a temporary dampener on risk appetite following records for the Dow and Bitcoin overnight. Dow futures fell 44 points or 0.12 per cent. S&P 500 futures shed six points or 0.14 per cent.

Overnight, the Dow finished 0.43 per cent ahead after breaking new ground. The S&P 500 also moved close to record territory, rising for a sixth session.

“The S&P 500 is now within a kissing distance from its September 2 record high of 4545, up 0.37% on the day with health care and utilities the outperforming sectors,” NAB currency strategist Rodrigo Catril said.The IT heavy NASDAQ index closed the day at -0.05%, taking a breather after a five day positive run that yielded a gain of 4.51%,” he added.

Back home, the annual general meeting and quarterly reporting season provided most of the morning’s major moves. Healius, AMP, Perpetual, CIMIC and BlueScope were among the leading gainers (more below). Woodside, Santos and Transurban declined.  

Gains were kept in check by a mixed morning for the heavyweight banks. Macquarie Group climbed 0.96 per cent to an eighth straight record. NAB put on 0.78 per cent, Westpac 0.58 per cent and CBA 0.12 per cent. ANZ dropped 0.11 per cent.

Rio Tinto was among the biggest initial drags before turning positive late morning. The miner’s shares fell 1.2 per cent following a negative reaction on overseas markets to the miner’s plans to invest in wind and solar power to reduce its carbon footprint. Australian shares were last up 0.12 per cent, defying declines of 3.26 per cent in London overnight and 3.89 per cent in New York.

BHP rallied 1.06 per cent. Fortescue Metals added 1.41 per cent.

Going up

News of a boom in revenues from Covid-19 testing lifted pathology firm Healius 6.59 per cent. Unaudited group revenues jumped 44 per cent over the first quarter to $690 million. Underlying earnings soared 159 per cent during what CEO Malcolm Parmenter described at today’s AGM as “an extraordinary start to the year”.

An earnings upgrade boosted BlueScope 2.58 per cent. The steelmaker raised its first-half guidance for underlying earnings to $2.1-$2.3 billion from previous guidance of $1.8-$2 billion. CEO Mark Vassella said the business benefitted from strong spreads, prices and demand.

Battered wealth manager AMP climbed 3.12 per cent amid signs outflows were slowing. The company reported net cash outflows of $1.4 billion last quarter, an improvement from a loss of $1.8 billion over the same period last year. Positive market returns kept assets under management steady at $131.2 billion.

CIMIC rose 7.6 per cent after reaffirming full-year guidance. The engineering group made $303 million in net profit over the first nine months of the year and secured $16 billion in new work.

Aristocrat Leisure hit an all-time high on strong demand from institutions for an entitlement offer to help fund the acquisition of UK gaming software developer Playtech. The Australian firm surged 5.34 per cent to $48.04 after a bookbuild for shortfall shares cleared at a premium of $5.25 to the offer price of $41.85 per share.

A strong start to the financial year lifted Perpetual 7.23 per cent. The fund manager increased assets under management by 2.7 per cent over the first quarter to $101 billion.

Going down

Woodside fell 1.31 per cent on news production dipped 2 per cent last quarter. Strong gas prices helped the energy giant increase sales revenue by 19 per cent to $1.531 billion.

Record third-quarter sales revenue failed to lift Santos during a generally negative session for energy stocks. The company increased sales revenue by 6 per cent to US$1.14 billion and reported a 33 per cent jump in free cash flow to US$359 million. The share price dipped 0.69 per cent.  

Transurban shed 0.51 per cent after reporting the impact of lockdowns on toll volumes in Sydney and Melbourne during the September quarter. Average daily traffic on the firm’s toll roads were 12.4 per cent lower than the same time last year and 34.5 per cent weaker than in Q319 despite improvements in Brisbane and the US.

Flight Centre sagged 5.91 per cent following a broker downgrade. Jarden cut its rating on the travel agent to ‘Neutral’ with a target of $21.30.

Other markets

Asian markets were mixed. Hong Kong’s Hang Seng overcame a heavy opening fall in Evergrande following the collapse of a deal for a rival to take a stake in the developer’s property services wing. The Hang Seng inched up 0.02 per cent as Evergrande trimmed an initial fall of more than 10 per cent to less than 1.5 per cent.

The Asia Dow dipped 0.03 per cent and Japan’s Nikkei 0.26 per cent. China’s Shanghai Composite gained 0.25 per cent.

Oil pushed higher after closing at a three-year peak overnight. Brent crude firmed 21 US cents or 0.24 per cent at US$86.03 a barrel.

Gold eased US$1 or 0.06 per cent to US$1,783.90 an ounce.

The dollar reached its highest level since July, rising 0.22 per cent to 75.31 US cents.

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