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Glum US index futures helped snuff out an attempted ASX rebound amid fears financial markets have rallied too high, too fast.

The S&P/ASX 200 sank 26 points or 0.4 per cent by mid-session towards a third straight loss. A ten-point rally in the benchmark Australian index gave way to further selling as US index futures hinted at further weakness following a brief respite on Friday.

The S&P 500 bounced 1.31 per cent on Friday, but the market mood appeared to deteriorate over the weekend as many states reported increases in COVID-19 infection rates. S&P 500 index futures were recently down 39 points or 1.3 per cent.

“The [stock market] melt-up may need to take a break, as sentiment has turned too bullish too rapidly,” Ed Yardeni, president and chief investment strategist at Yardeni Research in the US, wrote over the weekend. “Now that reopening is happening, there’s fear of suboptimal results: less social distancing triggering a second wave of the virus, followed by another round of lockdowns.”

Gains in tech stocks cushioned the local market from deeper losses. Buy-now-pay-later leader Afterpay climbed 3.3 per cent, Nextdc 2.89 per cent and Nearmap 1.9 per cent. The gains came after US tech giants outperformed the broader market last week. The Nasdaq shed 2.3 per cent over the five sessions to Friday, versus weekly losses of 4.8 per cent for the S&P 500 and 5.6 per cent for the Dow.

Consumer stocks were the biggest drags as investors factored in the demand implications of the long, slow recovery predicted by the US Federal Reserve last week. Media group Seven West slumped 5.2 per cent, real estate advertiser Domain Holdings 5.1 per cent, retailer JB Hi-Fi 3.3 per cent and supermarket Woolworths 2.4 per cent.

The heavyweight miners and banks were mixed. Rio Tinto gained 1.1 per cent, Macquarie Group 0.8 per cent, Commonwealth Bank 0.6 per cent and Westpac 0.1 per cent. Newcrest and NAB shed 0.2 per cent and ANZ 0.1 per cent. BHP was unchanged.

Shares in Healius climbed 14.8 per cent to a three-month high after the healthcare provider announced it had sold its medical centres to BGH Capital for $500 million. Building materials supplier Boral was the index’s other star performer, rising 5.8 per cent on news Zlatko Todorcevski will replace Mike Kane as CEO and Managing Director on July 1.

Most Asian markets retreated after Chinese economic data for May fell short of expectations, adding to signals the global rebound may not be as robust as projected a few weeks ago. While retail sales, industrial production and fixed asset investments improved from their April readings, all three were below the consensus among economists. Hong Kong’s Hang Seng eased 0.4 per cent and Japan’s Nikkei 0.5 per cent. China’s Shanghai Composite hovered near break-even.

Oil retreated during a general shift away from risk assets this morning. Brent crude dropped 92 cents or 2.4 per cent to $US37.81 a barrel. Gold edged up $1.10 or 0.1 per cent to $US1,738.40 an ounce.

The dollar skidded 0.48 per cent to 68.29 US cents.

What’s hot today

Web advertising platform engage:BDR (ASX:EN1) rebounded from all-time lows on news of a partnership with US web marketing company Kochava. engage:BDR intends to integrate Kochava’s audience-identification software to help sell online advertising. The company said i expects the impact on revenue to be “considerable” as ‘hyper-local’ ad sales increase. The impact on the EN1 share price was immediate: the stock bounced 60 per cent from a record low 0.5 cents on Friday to 0.8 cents today.

Theme park and bowling alley operator Ardent Leisure (ASX:ALG) was another of the morning’s winners after announcing it had found a white knight to help it ride out COVID-19. American private investment firm RedBird Capital Partners will buy a 24.2 per cent stake for US$80 million in Ardent’s Main Event Entertainment subsidiary, which operates bowling alleys in the US. Sixteen of Main Event’s forty-four centres remain closed due to the pandemic. RedBird has an option to up its interest to 51 per cent at a future date. Ardent’s share price jumped 4.1 per cent to 51 cents.

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