Rate hopes lift ASX as jobs evaporate

The share market swung sharply higher after dire jobs numbers reignited hopes of lower rates.

A directionless morning caught fire following the 11.30am EST release of figures showing the economy shed 19,000 jobs last month, lifting the seasonally-adjusted jobless rate to 5.3 per cent from 5.2 per cent. The dollar dived more than a third of a cent to 68.09 US cents.

The ASX 200 had been wallowing around break-even, but rose 46 points or 0.7 per cent to 6745 following the report’s release.

The headline jobs loss was the worst in three years, and triggered a swift reassessment of the rates outlook. The dollar had stabilised in recent months after recent reports offered signs of growing stability in the labour market, dampening the likelihood of further rate cuts.

Full-time employment declined by a seasonally-adjusted 10,300 and part-time by 8,700. Economists had expected jobs growth of around 16,000.

Tech stocks led the rally as Afterpay’s deal with eBay sent the sector leader’s shares up 6.2 per cent. Nanosonics rose 5.3 per cent, Appen 3.3 per cent and Altium 2.3 per cent.

Woolworths hit a five-year high, rising 2.8 per cent during a strong session for supermarkets. Coles rallied 2 per cent.

The banks have dragged on the index this week as several of the big four went ex-dividend. Today it was NAB’s turn, the share price falling 91 cents or 3.2 per cent as the bank paid out an 83-cent fully-franked dividend. ANZ, which paid out on Monday, rallied  0.6 per cent from a nine-month low. Westpac hit its lowest point since mid-May before rising 0.3 per cent. CBA added 0.4 per cent.

BHP opened at a nine-day low but pared its loss to 0.4 per cent following the jobs report. The company this morning announced CEO Andrew Mackenzie will stand aside at the end of the year. Mike Henry will take on the role from January 1.

Graincorp advanced 4.7 per cent as investors bet on better times after the company announced it was scrapping its final dividend after severe drought conditions in the eastern states helped send it to a statutory net loss of $113 million. Auto dealer A.P. Eagers slumped 7.1 per cent after revealing underlying operating profit before tax had fallen by 6 per cent for the calendar year.

What’s hot today and what’s not:

Hot today: high-tech mapmaker Nearmap surged 15.3 per cent after the company updated shareholders on its expansion into North America. Contract value in North America increased by 76 per cent last financial year as the company opened a second sales office, in New York. Domestic business also saw solid growth, with contract value for Australia and New Zealand increasing by 19 per cent. The company reached breakeven on cashflow and was admitted to the ASX 200.

Not today: G8 Education sagged 19.1 per cent to a two-month low after cuttinig its profit guidance. The childcare centre operator reduced its earnings before interest forecast to $131-$134 million from guidance of $140-$145 million given at the half-year announcement in August. Factors behind the downgrade included weak occupancy growth, which contributed to a higher wage bill than expected.

Asian markets were barely changed ahead of the 1pm EST release of Chinese economic data.  The Shanghai Composite inched up 0.1 per cent, Hong Kong’s Hang Seng eased 0.1 per cent and Japan’s Nikkei was flat. S&P 500 index futures were recently ahead one point or less than 0.1 per cent.

Turning to commodity markets, Brent crude futures improved 37 cents or 0.6 per cent this morning to $US62.74 a barrel. Gold eased $1 or 0.1 per cent to $US1,462.30 an ounce.