The stock market passed another milestone in its post-pandemic recovery, briefly breaking above 6000 after the government unveiled plans to boost construction.
The S&P/ASX 200 peaked at 6040, its highest level since March 9, before trimming its gain to 29 points or 0.5 per cent by mid-session. Despite the mid-morning fade, the benchmark index remained well on track for its sixth straight winning week following four days of gains.
Potential winners from a new $688 million HomeBuilder program advanced after the government released details of a package to help lift the building industry out of the doldrums. Grants of $25,000 will be available to encourage first-home buyers and owner-occupiers to build or renovate before the end of the year.
Wesfarmers, which owns the Bunnings chain of household hardware stores, climbed 1.6 per cent to a three-month high. Harvey Norman rose 4.7 per cent, Nick Scali 4.4 per cent, steelmaker Bluescope 2.8 per cent and building products manufacturer James Hardie 0.5 per cent.
The heavyweight financial sector led the initial rally, climbing 0.9 per cent to its highest level since mid-March as CBA gained 1.8 per cent, ANZ and NAB 0.9 per cent, and Westpac 0.8 per cent. The real estate sector was close behind as Dexus put on 2 per cent, Scentre Group 2.3 per cent and Stockland 1.6 per cent. European shopping centre operator Unibail-Rodamco-Westfield charged 10.6 per cent after reporting earlier in the week that 65 of its 90 centres had reopened.
Qantas soared 5 per cent after announcing plans to increase domestic flights to up to 40 per cent of normal capacity by the end of next month. The airline said it will increase its capacity from 5 per cent of pre-COVID-19 levels to 15 per cent by the end of June.
Buy-now-pay-later companies have enjoyed a stellar week. Splitit jumped 20.9 per cent this morning to its highest level since November after announcing strong growth in merchants using its platform. Afterpay edged up 0.6 per cent to a new all-time high. Z1P eased 4.1 per cent from yesterday’s record close.
Gold stocks have been big winners from the pandemic, but fell sharply this morning for a second session. Saracen Mineral shed 6.1 per cent, Silver Lake Resources 6 per cent, Northern Star 5.5 per cent and Newcrest 2.1 per cent. The price of gold steadied this morning, bouncing $2.70 or 0.2 per cent to $US1,707.50 an ounce after diving almost $30 overnight.
This morning’s rally faded following news of a record slump in retail sales in April. Sales fell a seasonally-adjusted 17.7 per cent as lockdown restrictions forced shops and restaurants to close their doors.
US index futures dipped following a strong night on Wall Street. S&P 500 index futures were recently down ten points or 0.3 per cent. Overnight, the S&P 500 rallied 42 points or 1.36 per cent after economic data came in less dire than economists predicted.
Asian markets traded mixed but little changed. China’s Shanghai Composite and Hong Kong’s Hang Seng both eased 0.2 per cent. Japan’s Nikkei inched up 0.1 per cent.
Oil retreated amid doubts over the timing of a conference call among major producers to discuss extending production caps. Brent crude declined 48 cents or 1.2 per cent this morning to $US39.31 a barrel.
The dollar dropped 0.4 per cent to 68.91 US cents.
What’s hot today and what’s not:
Hot today: Shares in FBR Limited (ASX:FBR) have almost quintupled in two sessions since the robotic-building company announced its brick-laying robot had reached commercial speed. The company announced yesterday the Hadrian X hit a peak bricklaying speed of 200 blocks per hour during testing for a house-build. The share price soared from 2.2 cents yesterday to a peak of 10.5 cents this morning before easing to 7.3 cents, a gain for the session of 151.7 per cent.
Not today: Nufarm (ASX:NUF) shares shrivelled after the fertiliser and weedkiller manufacturer warned weak European sales may dent second-half earnings. The company’s European operations had been most impacted by COVID-19, with sales down on typical seasonal patterns. Dry weather over much of the continent compounded demand and margin pressures in the fungicide market. The share price dropped 13.1 per cent to $4.78.