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A jittery share market relinquished most of its gains by mid-session as fears of an upsurge in coronavirus infections depressed buying interest for a second day.
A 63-point opening rally on the S&P/ASX 200 withered to six points or 0.1 per cent at the halfway mark ahead of the closure tonight of the NSW-Victoria border.
Mining stocks set the early pace as the market played catch-up after a 24-hour cycle that delivered huge gains in Asia yesterday and more modest rises in European and US stocks overnight. The S&P 500 in the US put on 1.59 per cent and the Nasdaq Composite soared 2.21 per cent to a record close.
Andrew Forrest’s Fortescue Metals Group – the so-called “third force in iron ore” – charged 5.5 per cent, outpacing rises of 1.1 per cent for sector leader BHP and 0.5 per cent for Rio Tinto.
Gold stocks shone as the precious metal pushed back towards US$1,800 an ounce. Gold was lately flat at $US1,793.50 an ounce. St Barbara was the morning’s best performer, climbing 8.5 per cent after announcing production exceeded 100,000 ounces of gold last quarter for the first time in two years despite the challenge of the coronavirus pandemic. Gold Road Resources rose 5.5 per cent, Perseus Mining 4.3 per cent and Newcrest 2.4 per cent.
The tech sector followed the Nasdaq higher. WiseTech gained 3.5 per cent, Xero 2.1 per cent and Appen 2 per cent.
Afterpay entered a trading halt while the buy now pay later leader tapped shareholders for $800 million. The company sugared the pill with a substantial discount to the last traded price and a trading update that included a 127 per cent year-on-year increase in underlying sales last quarter. Rival Sezzle rocketed 13 per cent to an all-time high on news of a record quarter and a near-400 per cent increase in merchant fees.
Energy and utility stocks were the biggest drags. Beach Energy slipped 3.1 per cent, AGL Energy 2.1 per cent, Santos 1.4 per cent, Woodside 1.3 per cent and APA Group 1.2 per cent.
Creeping weakness in three of the four major banks pulled the index off its highs. NAB sagged 1.2 per cent, ANZ 1 per cent and Westpac 0.9 per cent. CBA edged up 0.2 per cent. Other significant declines included a 1.9 per cent drop in insurer Suncorp and a 0.7 per cent loss for health giant CSL.
The Reserve Bank met this morning and is not expected to generate any fireworks when it updates its rates outlook at 2.30pm EST. The central bank has made it clear it expects the recovery from COVID-19 lockdowns to be a long process and plans to hold the cash rate at a record low 0.25 per cent until employment and inflation improve significantly.
Asian markets were mixed. China’s Shanghai Composite extended yesterday’s 5.7 per cent charge with a rise of 0.4 per cent. Hong Kong’s Hang Seng gave back 0.5 per cent and Japan’s Nikkei 0.6 per cent. S&P 500 index futures fell six points or 0.2 per cent.
Oil gave back most of its overnight gains. Brent crude dropped 20 cents or 0.5 per cent this morning to $US42.90 a barrel.
The dollar rolled over just short of 70 US cents and was lately down 0.07 per cent at 69.68 US cents.
Hot today:
For a few weeks in March, hand sanitiser was the new gold. So many companies pivoted towards the booming market that the ASX was forced to crack down on some of the more vaguely-worded market announcements. No such problems for eSense-Lab (ASX:ESE), whose shares briefly doubled this morning after the life sciences company announced it had secured a US distributor for its products. Blue Science Solutions will have an exclusive right to ESE’s terpenes-based sanitiser products provided it meets a first-year sales target of $3 million. ESE’s share price charged from 2 cents to 5.2 cents before paring its gain to 35 per cent at 2.7 cents.
