A weak open proved a buying opportunity for Australian traders as rising US index futures helped the ASX extend its winning run into a seventh session.
The S&P/ASX 200 shrugged off a 55-point opening loss to reach mid-session 15 points or 0.2 per cent ahead at 6160. At this morning’s peak, the benchmark index had put on more than 420 points or 7 per cent since last Monday as optimism grows over the reopening of the economy.
Soft overnight leads from Wall Street were swiftly superseded by a revival in US index futures ahead of tonight’s Federal Reserve policy update. S&P 500 index futures were recently ahead 16 points or 0.5 per cent in expectation that the central bank will continue to support the economy. The S&P 500 suffered a setback overnight, easing 0.78 per cent amid concern about how Friday’s unexpectedly strong jobs numbers might affect the central bank’s stimulus plans.
A mixed local market saw health and tech stocks take up the running as bank and energy stocks took a breather. CSL, one of yesterday’s biggest drags on the index, bounced 4 per cent. ResMed put on 1.1 per cent, Pro Medicus 2.4 per cent and Sonic Healthcare 0.4 per cent.
The nine largest tech companies by market capitalisation all rallied after the Nasdaq outperformed overnight. Significant gains included Afterpay up 6.4 per cent, Appen up 2.8 per cent and Xero up 2.7 per cent,
Harvey Norman climbed 7.3 per cent after announcing a special dividend. The retailer’s total sales increased 17.5 per cent from January as stuck-at-home Aussies refurbished and bought appliances.
The financial and real estate sectors that provided much of yesterday’s momentum succumbed to mild profit taking. CBA dropped 0.4 per cent, ANZ and NAB 1.2 per cent and Westpac 0.6 per cent. Vicinity Centres shed 4.5 per cent, Scentre Group 4.2 per cent and Stockland 3.2 per cent.
Oil companies came under pressure as Brent crude slumped 65 cents or 1.6 per cent to $US40.53 a barrel. Cooper Energy slid 3.4 per cent, Woodside 2.8 per cent and Santos 2.4 per cent.
The national mood continued to improve as the economy reopened. Westpac’s consumer sentiment index bounced 16.4 per cent last month to 88.1 from 75.6 in April. The index has returned to pre-pandemic levels, which were depressed by bushfires, drought and floods on the east coast.
Chinese shares retreated after May inflation data came in weaker than expected. The Shanghai Composite sagged 0.5 per cent. Hong Kong’s Hang Seng rose 0.3 per cent and Japan’s Nikkei 0.1 per cent.
Gold inched up $2 or 0.1 per cent to $US1,723.80 an ounce.
The dollar continued to ease against the greenback after poking its head above 70 US cents earlier this week. The Aussie was last down 0.06 per cent at 69.57 US cents.
What’s hot today and what’s not:
Hot today: Shares in biotech Immuron (ASX:IMC) quadrupled after the stomach disorder specialist announced progress with a treatment for diarrhoea it is developing with the US Navy. The company plans to conduct two Phase II clinical trials next year on a new oral therapeutic. Immuron CEO Dr Jaerry Kanellos said he hopes to have a product completed by the end of this year ready for clinical evaluation. The IMC share price jumped from 8.3 cents to 45 cents before retracing to 36.5 cents, a gain of 339.8 per cent.
Not today: A looming full-year loss due to the impact of COVID-19 helped send coal mining equipment manufacturer PPK Group (ASX:PPK) lower this morning. The company expects to incur an overall loss of less than $1 million for the financial year, including $2 million worth of adjustments in line with accounting standards. Coal mining has been crunched by weak demand, higher costs due to staffing changes to protect workers and tensions between China and the west. PPK shares dropped 8 per cent to $3.91.