ASX rises as banks, energy stocks are up, while consumer confidence plummets to record lows in the US
Energy producers and banks have spearheaded a rise on the Australian share market, which closed on an eight-day trading high.
News
Don't miss out on the headlines from News. Followed categories will be added to My News.
Energy producers and banks have spearheaded a rise on the Australian share market, which closed on an eight-day trading high.
The S&P/ASX200 benchmark index finished on the highs of Wednesday, closing up 80.3 points, or 1.51 per cent, at 5,393.4.
The All Ordinaries index finished 82.6 points higher, or 1.53 per cent, at 5,463.8.
“A good day on the markets,” Burman Invest portfolio manager Julia Lee said. The energy sector led the way, climbing 5.2 per cent as the price of Brent crude rose back up above $US21 a barrel.
MORE NEWS
Supermodel’s shock pregnancy announcement
Woodside, Santos and Beach Energy were up between 6.0 and 6.4 per cent, while Oil Search jumped 7.0 per cent.
All the big banks were higher, with NAB up the most, by 6.4 per cent to $16.29. ANZ gained 6.1 per cent to $16.66, Westpac rose 5.2 per cent to $15.69 and Commonwealth Bank was up 4.2 per cent to $61.07.
Consumer staples, healthcare and utilities were the only sectors to lose ground, with consumer staples down the most, by 1.8 per cent.
Coles dropped 4.4 per cent to $15.51 despite announcing it booked an unprecedented 13.1 per cent growth in quarterly comparable sales across its supermarkets.
Ms Lee called the results “fantastic - but of course the market is always forward-looking” and with the lockdowns looking likely to ease, traders are wondering how long Coles’ strong sales will continue.
Woolworths, which is set to announce its third-quarter results on Thursday, was down 2.1 per cent to $36.03.
Blood products giant CSL was a drag on the healthcare space, falling 1.4 per cent to $315.60.
Debt collection agency Credit Corp Group was the latest company to announce a capital raising because of the coronavirus crisis, with a $120 million fully underwritten institutional placement at an 11.6 per cent discount to its last closing price.
Lendlease resumed trade after completing a $950 million institutional placement at $9.80 a share.
Its shares closed Wednesday up 8.8 per cent to $11.62.
Crown Resorts gained 10.9 per cent to $9.54 after Hong Kong casino tycoon Lawrence Ho abandoned his attempt to gain a foothold in the company, selling his 9.99 per cent stake in the casino company to American private equity fund The Blackstone Group for $551 million.
“That’s put a rocket under their shares,” Ms Lee said.
In the heavyweight mining sector, BHP gained 2.1 per cent to $31.12, Rio Tinto dipped 0.3 per cent to $85.51 and Fortescue Metals rose 2.4 per cent to $11.74. Goldminers were mostly lower, with Newcrest, Evolution and Northern Star down between 0.8 and 2.3 per cent.
West African Resources gained 15.6 per cent to 74 cents after announcing it would acquire a gold deposit near its Sanbrado goldmine in Burkina Faso for $US45 million ($A68.8 million).
Orocobre dipped 3.2 per cent to $2.13 after announcing the expansion of its Olaroz lithium mine in Argentina would likely be delayed because of COVID-19 restrictions.
Meanwhile, the Australian dollar gained ground on its US counterpart for the sixth day in a row and was trading at more than 65 US cents for the first time since March 11.
One Aussie was buying 65.36 US cents, up from 64.82 US cents at Tuesday’s close.
US MARKETS
A plunge in consumer confidence eliminated early gains on Wall Street after world stock markets rallied on moves to ease coronavirus lockdown measures.
US stocks edged lower as more states prepared to relax coronavirus-containment measures, though a resurgence of economically-sensitive shares suggested growing optimism among investors about the path forward.
The S&P 500 slipped 0.5 per cent on news of a plunge in consumer confidence after pushing 1 per cent higher in early trading.
Technology stocks led the three major US stock indexes south – but they all remained within 20 per cent of their all-time highs.
“The stock market today is about money coming out of tech and going into economically sensitive value stocks, where prices have suffered the most,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
“The sense that states are opening up and the economy is beginning to grow again is causing this rotation.”
Smaller companies have fared better than larger ones in recent days, as they stand to benefit more from the state-by-state easing of shutdown restrictions. The Russell 2000, which tracks small-cap companies, posted its fifth straight advance.
In London, the FTSE 100 was up 2.2 per cent, the DAX 30 was up 2.2 per cent in Frankfurt, the CAC 40 rose 2.1 per cent in Paris and Hong Kong’s Hang Seng was up 1.2 per cent.
But the Conference Board Consumer Confidence Index said US consumer confidence plunged in April as millions lost their jobs and there was an unprecedented deterioration of an index that monitors their attitudes about current business and work conditions.
“Consumer confidence weakened significantly in April, driven by a severe deterioration in current conditions,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.
“The 90-point drop in the Present Situation Index, the largest on record, reflects the sharp contraction in economic activity and surge in unemployment claims brought about by the COVID-19 crisis.
“The uncertainty of the economic effects of COVID-19 will likely cause expectations to fluctuate in the months ahead.”
In midday trading, the S&P 500 index was down 0.1 per cent after being up by as much as 1 per cent earlier in the day.
“Equities are rallying and oil is crashing, so it must be another normal day in this topsy-turvy market,” observed analyst Chris Beauchamp at trading firm IG.
In extraordinary times, said Beauchamp, “the focus is on the slow but steady move out of tight lockdown policies across the globe.”
Milan Cutkovic, market analyst at AxiCorp, concurred, saying although equity markets remain in “risk-on mode,” the COVID-19 pandemic is “no longer the negative headlines that dominate daily life” as investors focus on a return to wider economic activity.
In the US, the S&P 500 and Dow Jones indexes initially rose after a string of upbeat quarterly reports took with investors turning hopeful of a pick-up in business activity as economies slowly reopen.
3M Co, the world’s biggest maker of N95 respirator masks, gained 4 per cent after reporting better-than-expected quarterly profit, although it suspended its 2020 forecast due to the health crisis.
Harley-Davidson Inc jumped 9.2 per cent as it took more steps to boost its cash reserves to deal with the drop in motorcycle sales due to lockdowns.
But declines in heavyweights Microsoft Corp and Amazon.com Inc weighed on the Nasdaq. Both companies are among a slew of tech-related firms set to report quarterly results later this week.