The Market Online - At The Bell

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

Australian shares struggled for traction as gains in health and mining were offset by a two-and-a-half-month low in the financial sector ahead of cuts to JobKeeper and JobSeeker payments.

The S&P/ASX 200 never got out of first gear this morning, briefly rising 20 points before fading to a mid-session loss of four points or less than 0.1 per cent.

What’s driving the market

Solid leads from overseas failed to translate into significant gains here as local investors awaited more evidence Wall Street has found a bottom after last week’s sell-off. Overnight, the S&P 500 bounced 1.27 per cent and the Nasdaq Composite 1.87 per cent.

Part of this morning’s problem was that the local market front-ran those US gains during yesterday’s 40-point bounce as positive US index futures signalled a strong start to the US trading week. While S&P 500 futures rallied again this morning, the rise of four points or 0.1 per cent was a pale shadow of yesterday’s advance.

A more significant problem for local investors is the on-going under-performance of the big four banks amid fears of a wave of business collapses and bad debts when JobKeeper payments are reduced on September 28. The financial sector sagged 1 per cent to its weakest level since June 1. ANZ shed 1.5 per cent, Westpac 1.2 per cent, NAB 1.1 per cent and CBA 0.9 per cent.

The dollar edged higher after the Reserve Bank reaffirmed its commitment to keep the cash rate low until it sees progress towards full employment and inflation within its 2 -3 per cent target band. The Aussie rose 0.3 per cent to 73.06 US cents.

Going up

The market’s losses were cushioned by gains in index heavyweights BHP +0.7 per cent, CSL +0.8 per cent and Wesfarmers +0.5 per cent.

Technology was the pick of the sectors as the Nasdaq’s performance provided a springboard for a rise of 1.4 per cent. The ‘WAAAX’ leadership group all rallied: WiseTech +1.3 per cent, Appen 0.6 per cent, Altium 1.3 per cent, Afterpay 3.4 per cent and Xero 0.5 per cent.

Small caps outperformed, a potential harbinger of recovering risk appetite. The Small Ordinaries Index climbed 0.9 per cent to its highest level in a week.

A positive morning for biotechs saw Mesoblast rise 6.3 per cent after winning an innovation award for its lead product, Clinuvel Pharmaceuticals gain 2 per cent after treating its first patient with its treatment for repairing skin cell DNA, and Avita Therapeutics add 1.9 per cent as it started enrolling patients for a skin repigmentation study.

Going down

Energy stocks declined after the Organization of the Petroleum Exporting Countries downgraded its demand outlook for the rest of the year, citing the dampening effects of Covid-19. Cooper Energy slid 3 per cent, Santos 2.1 per cent and Woodside 0.9 per cent.

Macquarie fell for a second session after yesterday’s downbeat trading outlook, easing 1.2 per cent. Telstra wallowed near 20-month lows, lately down 1.4 per cent.

Rio Tinto dropped 1.1 per cent from yesterday’s four-week high, bucking the trend in iron ore miners after the price of ore punched back through US$130 a tonne. Waste manager Cleanaway declined for a second day, falling 5.1 per cent after yesterday addressing media reports of behavioural problems in the workplace.

Sydney Airport fell 2.2 per cent following reports Qantas may move its corporate headquarters from Mascot, near Sydney Airport, to Western Sydney Airport or interstate.

Other markets

A mixed morning on Asian markets saw Hong Kong’s Hang Seng rise 0.5 per cent and Japan’s Nikkei fall 0.6 per cent. China’s Shanghai Composite traded flat.

Gold extended its biggest rise of the month, climbing $9.50 or 0.5 per cent to $US1,973.30 an ounce. Brent crude eased two cents or less than 0.1 per cent to $US39.59 a barrel.

What’s hot today and what’s not

Hot today: Traders betting lightning can strike twice briefly lifted gas explorer Jupiter Energy (ASX:JPR) more than 700 per cent. Jupiter was one of the trio of 1,000+ per cent risers in April that fell almost as fast as they rose, stranding speculators at heights unimaginable at the start of the run. Shares that rallied 17,400 per cent in two euphoric sessions in April jumped 733 per cent this morning after the company announced its Kazakh wells had gone into production. Chairman and CEO Geoff Gander took advantage of the original spike by selling shares from his superannuation fund and trading account.

Not today: Speculators in gold explorer White Rock Minerals (ASX:WRM) did not hang around for assays from the “most visually encouraging intercept” encountered in the latest drilling results from the company’s Last Chance gold target in Alaska. The share price tanked 32.6 per cent despite the company’s attempts to highlight the positives. Assays from 56 metres of quartz veining, silica breccia and trace arsenopyrite from one of eight holes are still pending. The company said it was encouraged by results to date.

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