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A broad rally pushed the ASX towards its highest close in a week after gains in US tech stocks bolstered hopes a Nasdaq-led market correction was easing.
The S&P/ASX 200 climbed 49 points or 0.8 per cent as all 11 sectors rallied. The communications and technology sectors set the pace, mirroring US action.
What’s driving the market
The Nasdaq rose for a second night, extending a rebound out of last week’s technical correction. The tech-heavy index put on 134 points or 1.21 per cent as Tesla, Facebook and Netflix all gained at least 2.4 per cent. The S&P 500 rose 0.52 per cent. The gains came ahead of what is expected to be a market-friendly update from the Federal Reserve tonight.
The Australian technology sector, which tracks the Nasdaq closely, rallied 1.8 per cent with the market leaders all recording gains. Afterpay tacked on 3.2 per cent, Altium 1.4 per cent, Xero 0.7 per cent and WiseTech 0.6 per cent.
A 9.5 per cent surge in online jobs marketplace SEEK propelled the telecommunications sector to the top of the pile. Telstra bounced 0.9 per cent from yesterday’s 20-month closing low.
Going up
With the big banks wallowing near multi-month lows, the top miners did much of the heavy lifting on the index. BHP rose 2 per cent and Rio Tinto 1.5 per cent, offsetting dips of 0.3 per cent for Fortescue Metals and 0.1 per cent for gold miner Newcrest.
Other heavyweight movers included shopping centre operator Scentre Group +1.6 per cent, biotech CSL +0.9 per cent and supermarket Woolworths +0.4 per cent.
Skinny gains of 0.1 per cent in CBA, NAB and Westpac and a 0.6 per cent rise in Macquarie outweighed a decline of 0.1 per cent for ANZ. The big four banks have been a deadweight on the index for the last few weeks amid concerns about the impact on the economy when JobKeeper and JobSeeker payments are reduced near the end of this month.
Online retailer Kogan bounced 8.5 per cent after the company gained 152,000 new customers last month, the biggest monthly increase in the history of the business. Gross sales were 117 per cent higher than the same period last year.
Going down
The gold sector pulled back from yesterday’s four-week high amid speculation recent share price gains have outpaced the price of the yellow metal. St Barbara slipped 1.4 per cent and Northern Star 0.7 per cent. The price of gold shook off early losses to rise 90 cents or 0.1 per cent this morning to $US1,967.10 an ounce.
QBE slid 0.6 per cent after a UK court ruled against the insurer in one aspect of a test case relating to whether policies covered the impact of COVID-19. The ruling, which QBE said it may appeal, opens the company to $170 million worth of claims.
Tabcorp retreated 0.3 per cent after completing the retail component of an entitlement offer to raise $230 million.
Other markets
Asian markets were tentative in their response to last night’s US gains. China’s Shanghai Composite edged up less than 0.1 per cent and Hong Kong’s Hang Seng and Japan’s Nikkei a little over 0.1 per cent. S&P 500 index futures rose four points or 0.1 per cent.
The threat from Hurricane Sally to US production helped drive oil higher. Brent crude climbed 50 cents or 1.2 per cent this morning to $US41.03 a barrel.
The dollar advanced 0.31 per cent to 73.18 US cents.
What’s hot today and what’s not
Hot today: Speculative mania ran hot at the lower reaches of the boards for a second day. A day after oil minnow Jupiter Energy (ASX:JPR) charged more than 700 per cent, thinly-traded coal company East Energy Resources (ASX:EER) surged 1,100 per cent before trade was paused. Similarly, petroleum explorer Sagalio Energy (ASX:SAN) surged 987 per cent before trade was suspended. Jupiter remained in a trading halt this morning while the company prepared a response to an ASX price query.
Not today: Shares in THC Global (ASX:THC) dived after the ASX asked the medicinal cannabis manufacturer pointed questions about its accounts after the company’s independent auditor issued a “qualified opinion” of the company’s half-year report due to insufficient evidence for sales forecasts used to justify carrying values of medicinal cannabis CGU in the accounts. THC said it had replaced some of the leadership team, but stood by the projections used to prepare the accounts. Not all shareholders appeared convinced: the share price slumped 10.9 per cent.
