ASX bounces back above 7000

Shares recovered on Wednesday, as fears of the impact of the coronavirus outbreak eased somewhat.

Market fears of the impact of the coronavirus outbreak eased somewhat on Wednesday. Picture: Nobuki Ito/Kyodo News via AP

Shares recovered more than half of the previous day’s losses on Wednesday, as fears of the impact of the coronavirus outbreak eased somewhat.

Global markets provided a strong lead for the ASX, boosting it by 0.5 per cent at the open to hit as much as 7046.8 in midday trading. By the close, the S&P/ASX 200 was higher by 37 points, or 0.53 per cent, to 7031.5.

Meanwhile, the All Ords finished up 38 points, or 0.53 per cent, to 7135.9.

On the economic front, December quarter inflation data printed a touch higher than anticipated, rising by 0.7 per cent quarter-on-quarter and by 1.8 per cent from a year earlier.

After a stronger unemployment read last week, the data has added to calls that the Reserve Bank will delay cuts to the cash rate next week, both JPMorgan and RBC pushing back their expectations to May and June respectively.

“While today’s data suggest that the inflation pulse remains too weak, there are hints of stability, and we note that annual first quarter inflation, due in late April, is set to benefit from some base effect from a low first quarter 2019 read, with both headline and core measures likely to lift modestly,” RBC Australian chief economist Su-Lin Ong said.

“The case to cut further from here needs to be more compelling as we approach the effective lower bound.”

Consensus expectations of a February cut are now at just 10 per cent, from 24 per cent before the data was released – a move cheered by the Aussie dollar which lifted 0.1 per cent through the local session to US67.69c at the close.

To equities, and the broad rebound touched all sectors bar consumer staples and communications.

Tech stocks were a key beneficiary, helped by strong results from Apple overnight.

Afterpay lifted 3.5 per cent to $37.99, Xero gained 2.6 per cent to $85.36, WiseTech put on 3.5 per cent to $24.80 and REA Group edged up by 0.9 per cent to $113.11.

Travel and tourism stocks rebounded slightly after a heavy sell-off on Tuesday.

Qantas chief Alan Joyce told reporters it was too early to tell the cost of the coronavirus to the airline, and that the impact from the Australian bushfires wasn’t material. That helped Qantas shares to edge higher by 2.4 per cent to $6.51.

Webjet rebounded by 4.3 per cent to $12.90 after a 14 per cent drop on Tuesday as it hit back at a broker note claiming it would struggle to compete with Google’s flight booking business.

Flight Centre added 1 per cent to $40.15 and Corporate Travel slipped by 0.16 per cent to $18.75 as it reassured investors any impact from the virus would be minor.

Treasury Wine shares were the biggest mover, sliding by 26 per cent to close at its daily lows at $12.35 after commencing a review of its operations after struggles in the US, including aggressive discounting and the rise of private brands.

A slight move higher in iron ore futures helped heavyweights to bounce – BHP added 0.6 per cent to $39.34, Rio Tinto added 0.44 per cent to $100.43 but Fortescue continued its move lower – slipping by 0.35 per cent to $11.53.

In the major banks – Commonwealth Bank gained 0.7 per cent to $84.61, Westpac added 0.8 per cent to $25.19, NAB put on 0.7 per cent to $25.80 and ANZ outperformed with a 1.3 per cent dip $25.79.

Bank Of Queensland added 0.95 per cent to $7.48 as its head of business banking Peter Sarantzouklis left the bank after just five months in the role.

OZ Minerals flagged cost overruns at its Carrapateena mine, prompting a 2.9 per cent jump to $10.06 while Transurban added 0.2 per cent to $15.96 even as its West Gate Tunnel project fell into chaos over a soil dispute.

Billboard advertiser oOh!media fell 6.7 per cent to $3.36 after its founder and chief Brendon Cook announced his intention to step down from the company after 30 years.