Join our daily newsletter At The Bell to receive exclusive market insights
The share market’s post-election bull run continued into a third week before the market operator suspended trading due to a technical hitch.
The S&P/ASX 200 climbed 79 points or 1.2 per cent to its highest level since early March. The ASX halted trade at 10.24 am EST, citing the “critical operational impact” of “ongoing market issues“.
A later update said the operator had identified the issue and was working on a resolution. Investors would receive a 30-minute warning before trade resumed. Today’s stoppage was the latest in a string of recent technical hitches at the market operator.
This morning’s rally brought the index within 11 per cent of its February peak. The benchmark has bounced more than 47 per cent since its pandemic low.
What’s driving the market
Domestic action mirrored Friday’s US trade, where optimism over a Covid-19 vaccine continued to direct investment flow. Battered value stocks with good leverage to economic growth outperformed growth stocks. The S&P 500 put on 1.36 per cent and the Dow Jones Industrial Average 1.37 per cent. Russell’s exchange-traded fund of value stocks climbed 5.7 per cent last week, while its growth fund fell 1.2 per cent.
“Friday saw gains of at least 1 per cent in the major US indices, the Dow, S&P 500 and Russell 2000 all doing better than the NASDAQ, so suggesting some further rotation out of what are now dubbed ‘stay at home’ technology stocks,” NAB Head of FX Strategy Ray Attrill said.
Investors are on alert for more vaccine news this week, Attrill added, “with Moderna expected to report Phase 3 results and Pfizer/BioNTech potentially applying for an emergency use authorisation by the end of the week.”
Further clarity on the election helped lift US index futures. S&P 500 futures jumped 28 points or 0.8 per cent after US media called Georgia for Joe Biden, giving the challenger a seemingly unassailable lead over President Donald Trump.
Going up
REITs led the rally, gaining 1.9 per cent. Mall operator Unibail-Rodamco-Westfield’s remarkable surge since last Monday’s Pfizer vaccine news continued with a jump of 9.3 per cent. Stockland gained 3 per cent, Scentre Group 2.7 per cent and Cromwell Property 2.6 per cent.
Fresh gains in oil ahead of an OPEC+ meeting this week helped lift the energy sector 1.6 per cent. Cooper Energy gained 2.9 per cent, Oil Search 2.7 per cent and Woodside 1.1 per cent. Brent crude climbed 27 cents or 0.6 per cent this morning to $US43.05 a barrel. OPEC and allied producers are expected announce a delay in lifting production caps due to expire in January.
ANZ rallied 2.6 per cent to its strongest level since June. CBA improved 1.9 per cent, NAB 1.8 per cent and Westpac 1.3 per cent. Macquarie Group lost 0.5 per cent as it traded without its dividend.
Global health giant CSL climbed 1.8 per cent on news it will build a new manufacturing facility in Melbourne to supply flu vaccines. Supported by a 10-year deal to supply the federal government, CSL will plough $800 million into the facility at the Melbourne Airport Business Park.
Suncorp climbed 1.1 per cent after restating its confidence its business insurance policies do not cover pandemics. A test case lodged by the Insurance Council of Australia is currently before the NSW Court of Appeal.
Going down
SkyCity Entertainment sank 4.1 per cent after announcing a major executive reshuffle. The gaming group said CEO Graeme Stephens would retire, along with CFO Rob Hamilton and Chief Marketing Officer Liza McNally. Nine Entertainment eased 1.8 per cent on news CEO Hugh Marks will stand down.
Elders eased 0.6 per cent from its highest level in almost a month despite releasing upbeat full-year figures as the agricultural sector recovered from a long-running drought. Underlying earnings increased by 62 per cent, boosting statutory after-tax profit 80 per cent to $122.9 million.
The tech sector faced mild downward pressure following the Nasdaq’s underperformance last week. Xero dropped 1.3 per cent, Altium 0.7 per cent and WiseTech 0.6 per cent.
Buy now pay later companies mostly retreated after ASIC opted against increasing regulation of the thriving sector. Splitit fell 1.1 per cent, Sezzle 1.4 per cent, Z1P Co 0.5 per cent and Afterpay 0.3 per cent. ASIC said regulatory changes already in train would “provide an opportunity for the industry to address consumer harm” after research showed one in five consumers were missing payments.
AusNet Services slid 2.3 per cent as it traded without its dividend. Toll road operator Transurban dipped 1.2 per cent.
Other markets
A positive morning on Asian markets saw China’s Shanghai Composite advance 0.2 per cent, Hong Kong’s Hang Seng 0.7 per cent and Japan’s Nikkei 1.6 per cent.
Gold rose $9.40 or 0.5 per cent to $US1,895.60 an ounce.
The dollar inched up 0.02 per cent to 72.9 US cents.
What’s hot today and what’s not
Hot today: The gold sector continues to consolidate. A little over a month after Saracen and Northern Star announced a ‘merger of equals’, Dacian Gold (ASX:DCN) and NTM Gold (ASX:NTM) announced a friendly merger. Dacian will offer one share for every 2.7 shares in neighbour NTM. The proposal has the support of NTM’s board and two of its largest shareholders. NTM’s Redcliffe Gold Project will be integrated with Dacian’s Mount Morgan operation. NTM shares jumped 42.1 per cent. Dacian shares dipped 1.4 per cent.
Not today: Shareholders in St George Mining (ASX:SGQ) sniffed at the latest drilling results from the Mt Alexander nickel sulphide project in WA. The most recent hole intersected the right type of rock, but not the massive sulphides the company hoped to strike. Executive Chairman John Prineas said the results had not undermined the company’s confidence in the project’s potential for massive nickel-copper sulphides. The share price sank 18.2 per cent.
