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Aussie shares hovered near 14-month highs in holiday-affected trade as investors parsed quarterlies and awaited the biggest week of the US earnings season.
The S&P/ASX 200 surpassed last Monday’s pandemic-era closing peak in early trade before trimming its advance to a single point or 0.02 per cent mid-session.
What’s driving the market
Advances in the banks and miners balanced declines in the supermarkets, Newcrest, CSL and Wesfarmers. Anzac Day holidays in many states and territories limited institutional participation.
Investors appeared reluctant to push the market far in either direction ahead of a week expected to set the market tone for the next month. Wall Street’s six largest companies are due to deliver quarterly updates. Four-tenths of the S&P 500 are lined up to report.
Friday’s strong US rebound had minimal impact. The S&P 500 bounced 1.09 per cent back towards record levels a day after a tax panic pushed the index down 0.92 per cent. The recovery came after updates indicated manufacturing and services sector activity was accelerating in most parts of the globe.
“Activity is roaring back on both sides of the Atlantic with the Markit PMIs surprising to the upside in the US, UK and Eurozone. Encouragingly the Services PMI is rebounding sharply with record highs being seen in Services for the US, UK and Australia. The data plays to the view of a sharp rebound in activity once restrictions and Europe’s vaccine rollout should allow that to continue in the months ahead,” NAB Director of Economics Tapas Strickland said.
Buying interest in “reopening stocks” was depressed by the latest Covid-19 lockdown in WA. While the state recorded no new cases yesterday, some lockdown measures were expected to be extended later today. Corporate Travel Management declined 3 per cent, Flight Centre 2.45 per cent, Webjet 1.25 per cent and Qantas 0.5 per cent.
Going up
The materials and financial sectors were Wall Street’s best performers on Friday, handing the local giants a strong platform. The big three ore producers vaulted ahead following reports Chinese ore futures hit record highs this morning. Fortescue Metals climbed 2.52 per cent, Rio Tinto 1.11 per cent and BHP 0.74 per cent.
Westpac shrugged off a warning of a $282 million hit to cash earnings ahead of next week’s first-half report. The bank said additional provisions for customer refunds, software write-downs and an accounting loss on a sale would be partly offset by gains in an investment in Coinbase and the sale of a holding in Z1P Co. The share price edged up 0.56 per cent. NAB put on 1.06 per cent, CBA 0.45 per cent and ANZ 0.42 per cent.
Health insurer NIB surged 10.76 per cent to a three-month high on news customer numbers increased by 3.7 per cent over nine months and claims were lower than expected. The company expects full-year underlying profit to increase to $200-$225 million.
The property boom helped lift real estate agent McGrath‘s half-year earnings to $6.6 million from $1.6 million for the prior corresponding period. The company said first-half momentum had continued into the new year. The share price jumped 7.69 per cent.
Perenti Global rallied 3.69 per cent after its North American subsidiary secured a letter of intent for work at Newcrest’s Red Chris Project in Canada. Perenti expects the contract to generate around $38 million over 16 months.
Integrated services provider Downer EDI climbed 1.86 per cent after selling its Otraco tyre management business to Bridgestone for $79 million.
Other heavyweights to advance included Aristocrat Leisure +0.63 per cent, Afterpay +0.31 per cent, Woodside +0.18 per cent and Transurban +0.04 per cent.
Going down
Traditional defensive value assets provided much of the morning’s down-pressure. Newcrest slid 2.11 per cent, Woolworths 1.53 per cent and Goodman Group 1.58 per cent. Wesfarmers shed 0.88 per cent, Coles 0.6 per cent and Telstra 0.29 per cent. Health giant CSL slipped 0.14 per cent.
Sigma Healthcare eased 2.17 per cent on news Mark Hooper will stand down as CEO and Managing Director after 11 years.
Other markets
A positive morning on Asian markets saw the Asia Dow advance 0.64 per cent, China’s Shanghai Composite 0.5 per cent, Hong Kong’s Hang Seng 0.2 per cent and Japan’s Nikkei 0.19 per cent.
US futures overcame an early wobble. S&P 500 futures inched up three points or 0.08 per cent.
Oil started the week on the back foot. Brent crude retreated 67 cents or 1 per cent to US$65.44 a barrel.
Gold nudged up $3.10 or 0.17 per cent to US$1,780.90 an ounce.
The dollar climbed 0.4 per cent to 77.74 US cents.
