Improving consumer confidence and positive US index futures helped fuel broad gains as the Australian share market marched to a new 11-week high.
All 11 sectors advanced as the S&P/ASX 200 climbed 103 points or 1.8 per cent. The rally extended yesterday’s 119-point surge and lifted the index to its highest level since March 11.
A US market holiday and low volumes proved no impediment as traders focussed on evidence of economic recovery. Consumer confidence improved last week for an eighth straight week, according to an ANZ-Roy Morgan survey. The consumer sentiment index rose 0.4 per cent to 92.7.
Yesterday’s traded volume on the ASX was the weakest since mid-February, but delivered the market’s biggest rise of the month. The benchmark index has now recouped more than 45 per cent of its losses during the February-March pandemic plunge.
Overnight, European markets recorded strong gains amid signs that new COVID-19 infections are declining and economies are reopening. The pan-European Stoxx 600 gained 1.47 per cent, Germany’s DAX 2.87 per cent and France’s CAC 2.15 per cent.
US index futures improved after an American biotech announced it had started a clinical trial on humans for a potential coronavirus vaccine. Novavax said it had enrolled trial participants and expected to release results in July. S&P 500 futures rose 40 points or 1.3 per cent. US markets were closed overnight for the Memorial Day long weekend.
In Asia this morning, China’s Shanghai Composite gained 0.7 per cent, Hong Kong’s Hang Seng 1.9 per cent and Japan’s Nikkei 2.2 per cent.
Energy and financial stocks led Australian sector gains. Woodside put on 2.9 per cent, Santos 3.5 per cent, Origin Energy 2.7 per cent and Oil Search 4.6 per cent. Three of the big four banks gathered pace as the morning wore on. ANZ surged 4.4 per cent, Westpac 4 per cent and NAB 3.6 per cent. CBA trailled with a gain of 1.6 per cent.
Among industrials, engineering group Monadelphous jumped 9.6 per cent on a broker upgrade, employee manager Smartgroup added 10.3 per cent, toll road operator Transurban 1.1 per cent and Sydney Airport 3.8 per cent.
The consumer discretionary sector outpaced the broader market on the way down and is now leading the rebound. The morning’s biggest winners included travel agent Helloworld +26.1 per cent, healthy fast-food operator Oliver’s +18.4 per cent and Flight Centre +10.7 per cent. A strong morning for the gambling industry saw Star Entertainment Group put on 6.2 per cent, Crown Resorts 2.6 per cent and Aristocrat Leisure 2.2 per cent.
The heavyweight miners were mixed but little changed. BHP edged up 0.5 per cent, while Newcrest traded unchanged and Rio Tinto eased 0.2 per cent.
Coca-Cola Amatil faded 2.1 per cent on news of a 33 per cent slump in volumes last month. Afterpay hit $50 a share for the first time ever before paring its advance to 2.2 per cent at $49.55.
Oil climbed with other risk assets. Brent crude rose 30 cents or 0.8 per cent to $US35.83 a barrel. Gold eased $2.30 or 0.1 per cent to $US1,733.20 an ounce.
The dollar improved 0.18 per cent to 65.56 US cents.
What’s hot today
There is a science to buying minerals explorers. Traders aim to buy when exploring starts and hopes are high, then exit before drilling results expose any cruel realities. Volt Resources (ASX:VRC) is on the upswing after announcing it has commenced exploring in the Siguiri Basin in Guinea within West Africa’s famed Birmian gold belt. The share price jumped 33 per cent upon yesterday’s announcement and rose another 34.4 per cent this morning. The program is expected to take 30 days.