Strength in commodity prices helped the share market rise for the first time in four sessions.
The S&P/ASX 200 climbed 57 points or 0.9 per cent by mid-session, recouping almost half the index’s 138-point deficit for a week dominated by setbacks in the fight against COVID-19. The index tumbled 93 points yesterday as the Victorian government closed the border with NSW and reimposed Stage 3 lockdowns on Melbourne and Mitchell Shire.
The market mood improved overnight as Wall Street offered a lesson in how to find the positives in a crisis. Record daily rise in coronavirus cases? Buy companies that outperform in lockdown. The S&P 500 rallied 25 points or 0.78 per cent as traders piled into Apple, Netflix and Amazon.
The ASX is short on equivalents to the kind of US stocks that fuelled last night’s rally, but investors duly bought the tech sector and miners following solid gains in iron ore and most metals. Rio Tinto climbed 3.4 per cent to a two-week high. BHP put on 2.2 per cent, Fortescue 1.4 per cent and South32 1.5 per cent.
Tech leader Afterpay notched another milestone in its seemingly unstoppable rise following broker upgrades from Macquarie and Morgan Stanley. The BNPL giant broke decisively through $70 for the first time, rising11.8 per cent to $73.77 a day after raising $650 million in an institutional placement at $66. Anyone with a time machine would be eyeing March 23, the day the share price bottomed at $8.01. Rival Sezzle surged 53.5 per cent this morning. Other notable tech gains included Computershare +2.8 per cent, Nanosonics +2.8 per cent and Appen +2.2 per cent.
A four-month high in oil lifted Woodside 3.3 per cent and Santos 3.9 per cent. Brent crude drifted seven cents or 0.2 per cent this morning to $US43.22 a barrel after closing overnight at its strongest level since March 6.
A fresh eight-year peak in gold helped lift Perseus Mining 5.3 per cent to its highest level in seven years. Evolution Mining rose 4.5 per cent to a record. Regis Resources added 3.5 per cent and Newcrest 2.3 per cent. Gold dipped $1 or 0.1 per cent this morning to $US1,819.60 an ounce.
The consumer staples sector trailled the broader market. Treasury Wine Estates sagged 0.9 per cent after warning it expects full-year earnings to fall 21 per cent as the pandemic takes a toll on sales. Supermarket Coles dipped 0.7 per cent.
Asset manager Netwealth was the standout in the financial sector, charging 6.1 per cent after reporting record fund inflows of $9.1 billion for the financial year. CBA gained 0.4 per cent, ANZ 1.4 per cent, NAB 0.7 per cent and Westpac 1.1 per cent.
Asian markets pared early gains. China’s Shanghai Composite was lately up 0.2 per cent, Hong Kong’s Hang Seng 0.1 per cent and Japan’s Nikkei 0.2 per cent. S&P 500 index futures faded five points or 0.2 per cent.
The dollar eased 0.13 per cent to 69.73 US cents.
What’s hot today and what’s not:
Hot today: Recce Pharmaceuticals (ASX:RCE) saw its market capitalisation almost double on news that two of the company’s antiviral compounds had been chosen for the government’s fast-track development program for promising treatments for COVID-19. The Recce 327 and 529 compounds were picked for the Priority 1 Candidate Group for testing by the CSIRO and University of Melbourne at the Doherty Institute. Researchers will put the compounds through a three-stage process over the next few months. Recce’s share price ran from 68 cents to $1.25 before trimming its advance to 53.7 per cent at $1.03.
Not today: Hand sanitiser manufacturer Holista Colltech (ASX:HCT) tumbled today after the company confessed revenues from its Natshield range will be a fraction of the target announced in April. The company now expects revenues of half a million dollars for the six months to June 30 of around $500,000 – well short of a sales target of $3.8 million announced in April. The company cited a range of reasons covering everything from disruption to supply chains caused by COVID-19 and racial unrest in the US to restrictions imposed on web sellers to stop price gouging. The share price plunged 33.6 per cent from 14 cents yesterday to 9.3 cents.