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The share market showed no signs of a Christmas hangover as a record close on Wall Street helped lift the market towards a third straight advance.
The S&P/ASX 200 rallied 29 points or 0.4 per cent by mid-session on low, holiday-affected volume. The market rose as much as 60 points before paring its gains in a repeat of Thursday’s Christmas Eve action.
What’s driving the market
President Donald Trump handed investors a late Christmas present on Sunday, belatedly signing into law a US$900 billion Covid-19 relief bill and US$1.4 trillion government spending bill. Five days after branding the stimulus bill “a disgrace”, the president backed down, approving packages that avert a shutdown of the federal government tonight and restore unemployment benefits for roughly 14 million Americans.
Wall Street welcomed the news by raising the S&P 500 by 32 points or 0.87 per cent to a record close. Germany’s main index also hit a new peak.
“The combination of vaccine rollouts, fiscal stimulus, and easy monetary policy continues to create a positive backdrop for equities going into 2021,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote. “The agreement on a fresh US fiscal stimulus package removes a recent hurdle, and global central banks continue to support the recovery by maintaining (and extending) monetary accommodation.”
The Democrat-controlled House of Representatives voted this morning to increase direct stimulus payments to Americans to US$2,000 from US$600. The vote came after the president urged Congress to put more money in consumers’ pockets. The bill to increase payments is expected to face significant resistance in the Republican-controlled Senate.
Going up
Technology was the pick of the sectors, rising 1.3 per cent as sector leader Afterpay jumped 3.3 per cent. Bravura Solutions added 2.8 per cent and Appen 2.5 per cent.
Fortescue Metals was the best of the mining majors, rising 1.7 per cent during a mixed session. BHP put on 0.1 per cent. Rio Tinto dipped 0.1 per cent. Gold giant Newcrest fell 0.6 per cent.
The big four banks marched higher. CBA gained 1.2 per cent, Westpac 0.8 per cent, ANZ 0.7 per cent and NAB 0.6 per cent. Other heavyweight movers included Goodman Group +1.5 per cent and Transurban +0.5 per cent.
Recovery plays saw solid gains as coronavirus infection figures continued to moderate in NSW. The state this morning reported six new cases. Flight Centre rose 3.8 per cent, Webjet 3.7 per cent and Qantas 1.3 per cent.
Crown Resorts rallied 0.3 per cent after opening its Crown Towers luxury hotel, bar and restaurant complex in Sydney yesterday. The proposed casino at the complex remained on hold pending the result of an inquiry into the company’s suitability to hold a licence.
A2M Milk continued to heal after a profit warning. The company improved 5 per cent after acquiring a 75 per cent stake in a New Zealand milk company.
Speculative interest in the market remained strong. The S&P/ASX Emerging Companies Index rose 1.5 per cent to an all-time high. The Small Ords advanced 0.8 per cent and has regained all of its pandemic losses, outpacing the broader market.
Going down
Beach Energy was the biggest prang on the index, falling 4 per cent after reporting its latest offshore well was a duster. The Ironbark 1 exploration well off the coast of WA reached 5,618 metres without striking significant hydrocarbons. The well will be plugged and abandoned.
Other notable falls included IDP Education -2 per cent, Viva Energy -1.7 per cent and Bingo Industries -1.6 per cent.
Other markets
A positive morning on Asian markets saw China’s Shanghai Composite ahead 0.1 per cent, Hong Kong’s Hang Seng add 0.9 per cent and Japan’s Nikkei gain 1.3 per cent.
US index futures remained buoyant following last night’s record close. S&P 500 index futures climbed 11 points or 0.3 per cent.
Oil rebounded from last week’s soft conclusion. Brent crude reversed 31 cents or 0.6 per cent this morning to $US51.21 a barrel. Gold bounced $2.90 or 0.15 per cent to $US1,883.30 an ounce.
The dollar steadied just below 76 US cents. The Aussie was last up 0.07 per cent at 75.93 US cents.
Hot today
Recently-listed Dusk Group (ASX:DSK) hit an all-time high following a well-received trading update. The home fragrance retailer said it expected sales over the first six months of the financial year to increase more than 50 per cent to around $90 million from $58.7 million over the same period last year. CEO Peter King said the result defied a period of disrupted trade during the Melbourne lockdown. The share price rose 12.8 per cent.
