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A new quarter got off to a cautiously positive start as Greater Brisbane emerged from lockdown and the laggard tech and mining sectors rebounded.
The S&P/ASX 200 overcame a fleeting dip into the red before advancing 28 points or 0.4 per cent.
Gains in Newcrest, the big three iron ore miners and Afterpay helped offset weakness in the supermarkets, CBA, Macquarie Group and Transurban.
What’s driving the market
Any window dressing associated with yesterday’s quarter-end appeared to unwind in the first hour, liberating the market to build steadily towards mid-session. A broadly positive night in the US encouraged traders to stay in the market ahead of the four-day Easter long weekend.
The S&P 500 hit a new record overnight before trimming its advance to 0.36 per cent. The Nasdaq Composite led with a rise of 1.54 per cent as the pendulum swung from “reopening plays” back to the technology giants that weathered the pandemic best.
That was enough to lift the battered ASX tech sector 1.9 per cent. Tech was the standout during last year’s market recovery, but tumbled 11.5 per cent this year as a spike in borrowing costs raised questions about valuations.
The materials sector also lost momentum last quarter, finishing a skinny 0.7 per cent higher after Chinese pollution controls knocked iron ore off its pandemic-era high. The sector climbed 1.3 per cent this morning as the big four (BHP, Fortescue, Rio Tinto and Newcrest) fired up.
Market sentiment got a welcome boost from news the three-day lockdown in Greater Brisbane ended at noon after the state recorded just one new locally-acquired Covid case yesterday. Another positive was news job vacancies increased by 13.7 per cent last quarter.
“A huge positive as the labour market looks to absorb those who lose their jobs as JobKeeper ends is that vacancy rates push to new highs,” Alex Joiner, Chief Economist at IFM Investors, tweeted.
House prices surged 2.8 per cent last month, the biggest month-on-month increase since October 1988, according to CommSec. Prices in 61 of 88 regions across Australia hit all-time highs.
February retail sales declined by 0.8 per cent, slightly less than the 1.1 per cent economists expected. The trade balance contracted sharply to $7.53 billion as exports declined 1 per cent and imports increased by 5 per cent.
Going up
Newcrest led the rally in materials, rising 3.4 per cent after gold rebounded above US$1,700 an ounce. Northern Star added 3.3 per cent, Gold Road Resources 3.4 per cent and St Barbara 3.3 per cent. Rio Tinto gained 1.4 per cent, Fortescue 0.8 per cent and BHP 0.6 per cent.
In the tech space, Afterpay climbed 3.1 per cent, Megaport 4.3 per cent, Xero 3.4 per cent and NextDC 3.6 per cent.
Telstra overcame yesterday’s wobble, rising 0.4 per cent towards seven-month highs. Other heavyweights to advance included Aristocrat Leisure +1 per cent, Wesfarmers +0.6 per cent, Goodman Group +0.5 per cent and CSL +0.4 per cent.
AMP climbed 5.3 per cent on news ANZ’s Deputy CEO Alexis George will replace Francesco De Ferrari as CEO. Ms George has more than 27 years experience in the financial services industry. ANZ shares eased 0.1 per cent.
News of an on-market share buyback lifted Boral 5.2 per cent to a two-and-a-half-year high. The construction materials manufacturer announced it had completed the sale of its 50 per cent share in the USG Boral joint venture for US$1.05 billion and would use the funds to reduce debt and buy back up to 10 per cent of its shares.
Explosives specialist Orica edged up 2.1 per cent after announcing Sanjeev Gandhi had taken over as CEO and Managing Director.
Going down
Regulatory action kept a lid on the financial sector. Macquarie Group sank 0.8 per cent after APRA ordered the merchant bank to retain an extra $500 million in capital to manage risk. Commonwealth Bank dipped 0.1 per cent after ASIC launched civil proceedings over alleged failures to apply waivers to fees on certain accounts. The bank said remediation payments of $64.2 million had been paid to affected customers.
Elsewhere in the sector, ANZ and Westpac eased 0.1 per cent, while NAB edged up 0.1 per cent.
Supermarkets Woolworths and Coles dropped 0.2 and 0.5 per cent, respectively. Brambles lost 0.4 per cent and Transurban 1.6 per cent.
Webjet fell 4.8 per cent after raising $250 million through a convertible note offering. The notes mature in April 2026 and can be converted into shares at $6.35, a 22.5 per cent premium to the share price used to set a note price. The proceeds will be used to pay down debt, fund potential acquisitions and for general use while the travel business recovers.
Other markets
Japan’s Nikkei was the pick of the major Asian markets, rising 1.22 per cent. China’s Shanghai Composite inched up 0.08 per cent. Hong Kong’s Hang Seng added 0.76 per cent. The Asia Dow gained 0.32 per cent.
US futures were little changed. S&P 500 futures rose a point or less than 0.1 per cent.
Gold gave back some of last night’s 1.8 per cent bounce. Metal for June delivery retreated $6.40 or 0.4 per cent to US$1,709.20 an ounce. Brent crude lifted 26 cents or 0.4 per cent to US$63 a barrel.
The dollar eased 0.15 per cent to 75.82 US cents.
