The Market Online - At The Bell

Join our daily newsletter At The Bell to receive exclusive market insights

The share market hit a fresh seven-month peak as optimism over the improving domestic outlook outweighed tepid leads from Wall Street.

The S&P/ASX 200 rallied 64 points or 1 per cent to regain the 6200 level at 6240 following Friday’s setback. The index swept past Thursday’s seven-month high-water mark. A close above 6210 tonight would mark the strongest finish since the February-March pandemic plunge.

What’s driving the market

The healthcare and technology sectors led a broad rally, rising 1.8 and 1.6 per cent, respectively. Support came from the heavyweight materials and financials sectors, both up 1.1 per cent. The defensive real estate investment trust sector was the morning’s only loser, easing 0.3 per cent.

Market sentiment was boosted by a jump in US stock index futures after House Speaker Nancy Pelosi issued the White House a 48-hour deadline to agree on a new coronavirus relief package. S&P 500 index futures climbed 23 points or 0.7 per cent, raising hopes of a positive start to US trade tonight if the deadline proves a circuit-breaker in long-running negotiations over a new package.

“The 48 [hours] only relates to if we want to get it done before the election, which we do,” Pelosi told ABC’s ‘This Week’ program.. “I’m optimistic, because again we’ve been back and forth on all this.”

Fading hopes for a pre-election deal helped pull US stocks down for three straight sessions last week before a mixed finish on Friday. The Dow Jones Industrial Average rose 0.39 per cent on the last day of the week. The S&P 500 finished flat and the Nasdaq Composite 0.36 per cent in the red.  

“Speaking over the weekend, President Trump said he was prepared to go higher than the US$1.8 trillion his team had been trying to offer Pelosi,” NAB Currency Strategist Rodrigo Catril said. “Trump said he could exceed the amounts floated so far and voiced confidence that he “could quickly convince” Republicans to back a “good” deal. The problem is that even if the White House reaches an agreement with the Democrats, Senate Republican remain opposed to a big package.”

Going up

The tech sector shrugged off Friday’s soft Nasdaq performance, climbing 1.6 per cent as the top ten largest listed companies all advanced. WiseTech put on 5.7 per cent, Megaport 3.2 per cent, Technology One 2.7 per cent, Computershare 2.5 per cent and Appen 2 per cent.

Healthcare juggernaut CSL rose 2.2 per cent ahead of tomorrow’s research and development investor briefing. The company is the leading Australian contender in the race to develop a coronavirus vaccine. Elsewhere in the sector, Cochlear gained 2.5 per cent, Sonic 1.1 per cent and Fisher & Paykel 0.7 per cent.

Turning to the market heavyweights, Fortescue Metals climbed 2.8 per cent, Transurban 2 per cent, Macquarie Group 1.4 per cent, BHP 1 per cent and Rio Tinto 0.6 per cent. The big four banks put on between 1.2 and 1.4 per cent.

The resumption of a share buyback helped lift South32 4 per cent. The miner reaffirmed its production guidance and said it would resume buying shares on market after increasing net cash from US$70 million to US$368 million last quarter.

Construction group Cimic rose 6.2 per cent on news fund manager Elliott will buy 50 per cent of subsidiary Thiess for $1.7-$1.9 billion. Cimic will retain a 50 per cent stake in the mining services provider, the largest in the world.

Going down

Crown Resorts held its market value throughout an inquiry into the company’s fitness to operate a new casino in Sydney, but the share price collapsed this morning when the company revealed it was under AUSTRAC investigation for potential compliance failures with anti-money laundering and counter-terrorism legislation. Shares sank 8.1 per cent to their weakest level since April.

Resolute Mining shed 0.7 per cent on news MD and CEO John Welborn had stepped down after five years. Chief Financial Officer Stuart Gale will fill the role while the company seeks a permanent replacement.

The biggest drags on the falling REIT sector were SCA Property Group -1.8 per cent, Charter Hall Retail -1 per cent and Charter Hall Group -1 per cent.

Other markets

A positive morning on Asian markets saw China’s Shanghai Composite advance 0.4 per cent, Hong Kong’s Hang Seng 0.7 per cent and Japan’s Nikkei 1.1 per cent.

Gold started the week on the back foot, falling $3.70 or 0.2 per cent to $US1,902.70 an ounce. Brent crude rose two cents or less than 0.1 per cent to $US42.95 a barrel.

The dollar inched up 0.2 per cent to 71.06 US cents.

What’s hot today and what’s not:

Hot today: News of a surge in registrations for the mobile gaming platform of Emerge Gaming (ASX:EM1) propelled the share price to its highest level in five years. Pre-registrations for the eSports tech company’s MIGGSTER mobile platform passed three million in the first week. The platform, due to launch next month, offers subscribers a chance to compete for cash prizes in exchange for a monthly fee. The share price surged 61.1 per cent to 8.7 cents.

Not today: Berkeley Energia (ASX:BKY) lost more than a quarter of its market value after Spanish lawmakers proposed amendments to legislation that would stymie Berkeley’s proposed uranium mine in the country. A proposed amendment to a draft climate change and energy bill would prohibit the “investigation and exploitation of radioactive minerals”. Berkeley said it believed such a prohibition was contrary to the Spanish Constitution. The share price dived 28.3 per cent to 43 cents.

More From The Market Online
The Market Online Video

Market Open: Mellow session on US markets – big deals on the table

The Australian share market is expected to open fairly flat, in line with US markets. There…
The Market Online Video

TMH Market Close: ASX200 closes lower, tech sector tumbles 3.9pc

The ASX 200 closed lower, with every sector recording a loss. Tech was the biggest drag…

ASX Today: European shares rise; Chinese factory activity contracts

Australian shares face an uncertain start to the new year as traders weigh a positive session in Europe overnight against a sharp contraction

ASX Update: Heavy selling resumes as 2023 brings no relief

The share market slumped to an eight-week low as signs of a sharp slowdown in major trading partner China offset positive leads from