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The share market moved back into positive territory for the week as banks and recovery plays helped extend a rebound from four-week lows.
The S&P/ASX 200 rallied 67 points or 1.1 per cent to 6130, erasing the effects of a soft start to the week that saw the index fall as low as 5909 on Tuesday.
The benchmark index bounced 1.8 per cent yesterday as the dollar fell from a two-year high and iron ore hit a multi-year peak.
What’s driving the market
Wall Street‘s record run continued overnight with all-time highs for the S&P 500 and Nasdaq as the Dow moved within 2 per cent of its February peak. The S&P 500 put on 1.54 per cent, the Nasdaq 0.98 per cent and the Dow 1.59 per cent.
Value stocks outperformed the momentum movers that have fuelled Wall Street’s rebound since March. The same dynamic played out here, with recovery prospects such as travel and tourism and consumer-facing stocks filling many of the top slots on the gainers’ list. Credit Corp climbed 5 per cent, Flight Centre 4.6 per cent, Webjet 3 per cent and Crown Resorts 2.6 per cent.
The financial sector, which is heavily leveraged to a recovery in the economy, rose 1.5 per cent. Macquarie Group put on 3.1 per cent, ANZ 2.4 per cent, NAB 2.2 per cent, Westpac 2.3 per cent and CBA 1.1 per cent.
The dollar continued to drift lower this morning, easing pressure on export prices. The Aussie dropped 0.07 per cent to 73.23 US cents. ABS data this morning showed exports declined four per cent in July.
Going up
Gaming group SkyCity Entertainment jumped 7.4 per cent as the company flagged an improvement in earnings this financial year following a 59.7 per cent dive in full-year net profit to $66.3 million in FY20. Qantas edged up 0.6 per cent to its highest level since June.
At the heavyweight end of the market, shopping centre operator Scentre Group gained 2 per cent and insurer IAG 2.8 per cent. Other property stocks to advance included Dexus +4.2 per cent, Unibail-Rodamco-Westfield +3.1 per cent, Mirvac +2.6 per cent and Charter Hall Group +2.5 per cent.
Buy now pay later companies mostly steadied following two days of heavy selling on news PayPal will offer the US market interest-free instalments. Afterpay bounced 1.4 per cent, Z1P Co 1.3 per cent and Openpay 1.9 per cent. Splitit declined 1.2 per cent.
Going down
BHP was the biggest drag on the index, falling 1.7 per cent as it traded without its dividend. Investment manager Spark Infrastructure and software maker Altium also went ex-dividend, dropping 4.8 per cent and 1.9 per cent, respectively. Rio Tinto eased 0.4 per cent.
Gold miner Newcrest slid 0.4 per cent after a rebound in the US dollar from two-year lows helped depress the prices of precious metals. Gold Road Resources declined 1.9 per cent, Regis Resources 1.5 per cent and Silver Lake Resources 1.3 per cent.
Other markets
US index futures marked time following a rally that has seen the S&P 500 advance for nine of the last ten sessions. S&P 500 index futures were recently ahead two points or less than 0.1 per cent.
A positive morning on Asian markets saw China’s Shanghai Composite rise 0.4 per cent, Hong Kong’s Hang Seng 0.3 per cent and Japan’s Nikkei 1.3 per cent.
Oil hovered near its lowest in a month. Brent crude inched up seven cents or 0.2 per cent to $US44.50 a barrel. Gold bounced $10.40 or 0.5 per cent to $US1,955.10 an ounce.
What’s hot today and what’s not
Hot today: One of the more cynical theories regarding the speculative end of the market is that the more opaque the news announcement, the likelier the share price is to run. Punters jumped into Opyl (ASX:OPL) after the tech minnow announced it had created software using artificial intelligence that could predict the success or failure of Covid-19 clinical trials. The company hopes drug and device makers will adopt the software to help refine their product development strategies. The share price leaped 76.9 per cent before trading was suspended while the company responds to queries from the Australian Stock Exchange.
Not today: Infant formula producer Bubs Australia (ASX:BUB) has been one of the share market’s success stories over the last few years, climbing from 10 cents at the start of 2017 to a high of $1.61 last year. The share price fell 5.5 per cent to 86.5 cents this morning after the company raised $28.3 million at 80 cents a share to buy a factory in China and expand overseas operations.
