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Bank and property stocks helped the share market start the first big week of earnings season on a positive note.
The S&P/ASX 200 rallied 77 points or 1.3 per cent to a nine-session high, reversing Friday’s 37-point drop.
The big four banks set the pace, rising between 2.3 and 2.6 per cent ahead of earnings updates from Commonwealth Bank and NAB. CBA reports full-year earnings on Thursday. NAB releases a quarterly update the following day.
With investors braced for bad news, property group GPT was rewarded with a rise of 1 per cent after unveiling a net half-year loss of $519.1 million. The group attributed the loss primarily to downgrades in property valuations totalling $711.3 million as a result of the coronavirus pandemic. CEO Bob Johnston declined to provide full-year profit guidance but said the group’s balance sheet was strong and it was well placed to navigate the current uncertainty.
The report appeared to lift confidence in the rest of the REIT sector. Scentre Group gained 2.9 per cent, Dexus 2.2 per cent, Mirvac 1.2 per cent, and Goodman 0.6 per cent.
Rail freight operator Aurizon overcame initial losses to advance 1.1 per cent after reporting a 10 per cent increase in underlying full-year earnings before interest and tax to $909 million. Managing Director and CEO Andrew Harding said the company’s operations had seen no material impact from the pandemic.
Consumer stocks offered solid gains at the start of a week when health experts anticipate Victoria’s lockdown should start to pay off with lower infection rates. Deputy Chief Medical Officer Nick Coatsworth said, “We do have some confidence in the coming days to week we’ll see those numbers come down.” Victoria this morning reported 322 new cases, the lowest single-day tally since July 29. Aristocrat Leisure gained 5.2 per cent, Flight Centre 4 per cent, Woolworths 2.6 per cent. Coles 2.5 per cent and Harvey Norman 2.3 per cent. Homeware retailer Adairs soared 13.5 per cent to a new peak on news of a sharp increase in online sales.
Resource stocks overcame initial weakness as gains in oil and precious metals this morning helped offset a soft end to last week on commodity markets. Brent crude climbed 40 cents or 0.9 per cent this morning to $US44.80 a barrel. Gold rose $9.20 or 0.4 per cent to $US2,037.10 an ounce as the US dollar fell after President Donald Trump signed off on a new stimulus package in controversial fashion. Gold miner Newcrest and BHP both edged up 0.5 per cent. Rio Tinto dropped 1.4 per cent and Woodside Petroleum 0.2 per cent.
Biotech Mesoblast was the index’s strongest performer, surging 9.6 per cent to its highest level in almost six years. Other standouts included News Corp +5.8 per cent after reporting last week, Credit Corp +6.5 per cent and and Nearmap +5.8 per cent. At the other end of the index, Ooh!Media skidded 5.5 per cent, Reliance Worldwide 3.8 per cent and IGO Limited 2.9 per cent.
US index futures improved as the morning wore on following a mixed finish to Friday’s trade. S&P 500 index futures were recently ahead two points or 0.1 per cent. On Friday, the S&P 500 edged up less than 0.1 per cent after negotiations for a new US coronavirus relief package broke down. The Nasdaq sank 0.87 per cent.
A mixed morning on Asian markets saw China’s Shanghai Composite up 0.5 per cent while Hong Kong’s Hang Seng fell 0.3 per cent and Japan’s Nikkei 0.4 per cent.
The dollar rose 0.13 per cent to 71.66 US cents.
Hot today: Recently-listed Emerald Clinics (ASX:EMD) briefly bounced more than 100 per cent on news it had been engaged by a subsidiary of the world’s largest medicinal cannabis company to help refine patient treatments in the UK. Emerald’s role will be to develop a ‘Real-World Evidence’ system for Spectrum Biomedical UK, a subsidiary of Canopy Growth. The contract is valued at up to $723,000, including an upfront fee of $270,000. EMD’s share price shot from 4.3 cents to 12 cents before easing to 7.2 cents, a gain of 67.4 per cent.
