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The share market pared strong early gains as souring US index futures took the shine off an overnight Wall Street rebound.
An opening 77-point bounce on the S&P/ASX 200 withered to 30 points or 0.5 per cent mid-session as the big four banks and the REIT sector gave up their gains. The benchmark index tumbled 2.2 per cent yesterday to a ten-week closing low after the Nasdaq’s three-session loss blew out to ten per cent, the fastest technical correction in its history.
This morning’s rally faltered as S&P 500 futures faded 11 points or 0.3 per cent, raising doubts about the durability of an overnight recovery in the US.
What’s moving the market
Wall Street roared back last night when dip buyers swooped on battered winners from the ‘stay-at-home’ economy. The Nasdaq bounced 2.71 per cent with Apple, Microsoft and Tesla all gaining at least 4 per cent. The broader S&P 500 rose 2.01 per cent and the Dow 1.6 per cent.
Local investors followed the American playbook, lifting the tech sector 2.4 per cent. The WAAAX sector leadership group all rallied: WiseTech +0.6 per cent, Afterpay 4.2 per cent, Appen 3 per cent, Altium 0.8 per cent and Xero 1 per cent. Technology One added 3.1 per cent and Megaport 4 per cent.
Vaccine concerns were alleviated by reports AstraZeneca could resume testing its experimental candidate for Covid-19 as soon as next week following a review after a trial volunteer suffered an adverse reaction. The federal government has ordered 33.8 million doses of the vaccine for Australians if it passes clinical trials. Victoria this morning announced 51 new cases, the second-lowest daily tally in two months.
Going up
Energy and materials were the next best performers after the technology sector following overnight rallies in oil, copper and precious metals. Gold miner Newcrest put on 2.2 per cent, Rio Tinto 1.6 per cent, Woodside Petroleum 0.5 per cent and BHP 0.5 per cent.
Biotech Clinuvel Pharmaceuticals was the best performer on the index, climbing 8.3 per cent on progress with a drug to help repair skin damaged by sunlight and prevent skin cancer.
Going down
The threat of a strike at Resolute Mining‘s Syama gold mine in Mali sent the share price down 7.6 per cent after the company withdrew previous production and cost guidance. Resolute said it had received a notice from the local union threatening a 10-day strike unless workers stood down on full pay because of Covid-19 are reinstated.
Pharmacy supplier Sigma Health faded 0.8 per cent after reporting a 9.5 per cent lift in half-year revenues to $1.64 billion, boosted by sales of personal protective equipment (PPE). CEO and Managing Director Mark Hooper declined to offer earnings guidance due to uncertainty caused by Covid-19, but said he was confident “the momentum we have been building its sustainable and repeatable”.
The big banks sucked some of the momentum out of the rally, rolling over as the morning progressed. NAB eased 1 per cent, ANZ 0.7 per cent, Westpac 0.5 per cent and CBA 0.3 per cent.
Property groups were also a drag. Scentre Group fell 2.8 per cent, Abacus 2 per cent, Lendlease 1.9 per cent and Cromwell 1.2 per cent.
Other markets
The reaction on Asian markets to the Wall Street rebound was cautious. China’s Shanghai Composite and Japan’s Nikkei rose 0.5 per cent. Hong Kong’s Hang Seng gained 0.2 per cent.
The overnight rebound in oil threatened to be short-lived. Brent crude sagged 17 cents or 0.4 per cent to $US40.62 a barrel. Gold inched up 10 cents or less than 0.1 per cent to $US1,955 an ounce.
The dollar slipped 0.06 per cent to 72.71 US cents.
What’s hot today and what’s not
Hot today: Music company Jaxsta (ASX:JXT) lit up the speculative end of the market, surging more than 400 per cent on news of a partnership with Songtrdr worth an initial $1.92 million. The five-year commercial agreement includes an investment by Songtrdr in the company of $1.42 million via a convertible note. Jaxsta operates a music credits database for the music industry. The share price bolted from 2.6 cents to 15 cents before paring its rise to 284.6 per cent at 10 cents.
Not today: The struggles continue for department store Myer (ASX:MYR). The share price dived 15.7 per cent after the group declared a statutory full-year net loss of $172.4 million. The result was affected by lengthy store closures during April and May and a 15.8 per cent decline in total sales. Investors looking for positives were cheered by record online sales of $422.5 million as customers continued to migrate to online shopping.
