Local shares ends first week of 2021 higher despite US election turmoil

Financial markets have overlooked the turmoil unfolding in the US, finishing the first week of the New Year in positive territory.

The ASX has ended the first week of 2021 in positive territory. Picture: NCA NewsWire / Christian Gilles

Local stocks ended Friday’s trading day in positive territory following gains in US markets which are being spurred on by investors welcoming the prospect of additional fiscal stimulus under the Biden administration.

The benchmark S&P/ ASX 200 index reached a three-week high adding 45.9 points, or 0.7 per cent to 6757.9, with technology and consumer discretionary sectors seeing the biggest daily uplift.

The broader All Ordinaries index closed the week up 43.7 points, or 0.6 per cent to 7024.2, while the Australian dollar was buying 77.69 US cents at the end of the local session.

Gold at the close was fetching $US1909.46 an ounce.

Global financial markets have been able to hold up despite the turmoil that has unfolded in the US capital Washington DC after a pro-Trump mob stormed Capitol Hill in an attempt to stop the certification of the 2020 election which will place Joe Biden as the next president.

Financial markets have overlooked the chaos caused by the pro-Trump mob in Washington DC. Picture: Spencer Platt/ Getty Images/ AFP. 

JPMorgan’s Head of Cross-Asset Fundamental Strategy John Normand said the market had overlooked the chaos from both the protest and the Georgia senate runoffs.

He said the outcome had brought “more continuity than disruption”.

“Now under a unified government, the late December US stimulus package of $US900bn ($1.2bn) will almost certainly be boosted in early 2021, assuming the incoming administration prioritises income support over tax increases,” Mr Normand said.

Locally, CommSec analyst Steven Daghlian said the first week of the new year for the ASX had been an “above average” start.

“It has been a massive week. We’ve had big gains and big losses over the past week … but it has been an above average start to 2021,” he said.

Shares in waste management company Bingo Industries saw the largest surge, jumping 8.7 per cent to $2.74 each, while IGO Limited experienced the largest decline, falling 4.2 per cent to $7.25 per share.

Qantas shares rose 0.2 per cent to $4.92 each, despite Queensland issuing a new lockdown for greater Brisbane and new international travel restrictions, which could prompt a reduction in flight volumes.

Qantas shares rose despite the Queensland government implementing a strict lockdown for Greater Brisbane. Picture: Sam Mooy/ The Australian Newspaper

Commonwealth Bank ended the session up 1.2 per cent to $85.63 per share, while Westpac shares closed 1.45 per cent higher to $20.28 each.

ANZ increased its share price by 0.85 per cent to $23.84 each and NAB finished the week up $1.35 per cent to $23.35 per share.

Mining giant Rio Tinto ended the session 1.3 per cent lower to $124.01 per share after its stellar run on Thursday which made it the best performing stock of the day.

Rival BHP closed 0.5 per cent lower to $46.67 per share, while Fortescue Metals pulled back 2.3 per cent to $25.33 per share.

Major buy now, pay later companies clawed back from previous losses experienced earlier in the week, with market darling Afterpay surging 6.6 per cent to $116 per share at the close, while competitor Zip saw its share price lift 6.3 per cent to $5.54 each.

Telstra shares were up 0.3 per cent to $3.02 per share, while Flight Centre stock tumbled 0.5 per cent to $15.66 each.

Shares in Wesfarmers climbed 1.8 per cent to a closing price of $51.85 each, while Woolworths at the end of session edged 0.85 per cent higher to $40.54 per share.

Originally published as Local shares ends first week of 2021 higher despite US election turmoil