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Soft US index futures and a record rise in coronavirus cases in Victoria failed to derail the stock market’s first rally in three sessions.
The S&P/ASX 200 reached mid-session 50 points or 0.8 per cent ahead following positive leads from Wall Street. A Federal Reserve pledge to use the “full range of tools” at its disposal to support the economy through the pandemic helped lift the S&P 500 1.24 per cent overnight.
The local index briefly lost altitude as political wrangling weighed on US index futures and Victoria announced 723 new COVID-19 cases, the biggest daily increase since the start of the pandemic. New South Wales reported 18 new cases and Queensland three new cases.
S&P 500 index futures declined five points or 0.2 per cent as negotiations for a new stimulus package stalled on Capitol Hill. White House Chief Staff Mark Meadows this morning said the two sides were “nowhere close to a deal” on new measures to replace the existing stimulus package that expires tomorrow.
The tech sector set the pace here, rebounding 2.7 per cent following a week and a half of downward drift . Encouraged by solid gains for tech leaders in the US, WiseTech rallied 5.9 per cent, Nanosonics 3.7 per cent, Nearmap 3.3 per cent and Xero 3.1 per cent. The Nasdaq gained 1.35 per cent overnight as the heavyweight tech leaders rallied ahead of quarterly earnings updates tonight.
Gains on the S&P/ASX 20 were led by poker machine manufacturer Aristocrat +3 per cent, insurer IAG +2.5 per cent and property group Goodman +2.5 per cent. Telstra gained 1.5 per cent, BHP 1.3 per cent and Wesfarrmers 1.2 per cent.
Rio Tinto climbed 0.8 per cent after revealing a half-year profit of $4.6 billion, down 20 per cent on the same period last year. Fortescue, the “third force in iron ore”, surged 3.7 per cent to a new peak on news the company shipped record volumes of ore last year of 178.2 million tonnes, a six per cent increase on FY2019 and ahead of guidance.
Macquarie Group reported a drop in net profits last financial year and declined to offer earnings guidance, but saw its shares rise 0.5 per cent. Profits declined 8 per cent from the previous year to $2.731 billion as the bank made provisions for bad and doubtful debts. A mixed session for the big four banks saw Commonwealth Bank rise 0.7 per cent, while NAB shed 0.1 per cent, Westpac 0.3 per cent and ANZ 0.5 per cent.
Newcrest marched counter to the gold price for a second session, easing 0.4 per cent despite a ninth day of gains for the precious metal. A short-term sugar hit from the Fed’s pledge to keep interest rates low appeared to wear off this morning: the price of gold fell back below US$1,960 an ounce, lately ahead $4.70 or 0.2 per cent at $US1,958.10 an ounce.
A low-key morning on Asian markets saw China’s Shanghai Composite down 0.2 per cent, Hong Kong’s Hang Seng ahead 0.4 per cent and Japan’s Nikkei up less than 0.1 per cent.
Oil extended overnight gains. Brent crude inched up five cents or 0.1 per cent to $US43.80 a barrel.
The dollar retreated 0.17 per cent to 71.74 US cents.
What’s hot today and what’s not:
Hot today: Advanced communications specialist Elsight (ASX:ELS) saw its share price double after its signed a deal to distribute its flagship product in the US. The company will partner with Kinetx Prime to deliver telehealth services through Elsight’s Halo product. The deal includes an initial order worth $2.3 million. Elight’s share price shot from 30 cents to 60 cents before retracing to 49.5 cents, a gain of 65 per cent.
Not today: A downbeat production forecast sent gold-copper miner Sandfire Resources (ASX:SFR) into reverse. The share price sank 7.6 per cent after the company issued guidance of 67-70,000 tonnes of contained copper in FY2021 – down from production of 72,238 tonnes in FY2020 – and 36-40,000 tonnes of contained gold, down from 42,263 tonnes. The downgrades followed a year of record production.
