Oil boost buoys 4.3pc ASX lift

Shares touched a high of 5302.2 late in the session as oil futures bounced and US stockmarket futures soared.

In the major banks, Commonwealth Bank put on 3.9 per cent to $62.47, Westpac rose by 5.4 per cent to $16.35, ANZ put on 4.8 per cent to $16.54 and NAB finished higher by 5.4 per cent to $16.47.

The local market held on to gains for the session to notch an impressive 4.3 per cent gain amid optimism of a deal to curb oil supply and as more local companies emerged in search of capital.

Shares touched a high of 5302.2 late in the session as oil futures bounced and US stockmarket futures soared, but the benchmark S&P/ASX 200 finished the session up 219 points, or 4.33 per cent, at 5286.8.

Meanwhile, the All Ords added 4.24 per cent, or 217 points, to 5323.6.

That’s despite weakness on US markets of Friday, after the latest non-farm payrolls report highlighted the virus hit on the nation’s unemployment – with 701,000 jobs lost over the month, its biggest monthly decline in 11 years.

The flow of new capital raisings picked up pace as companies rushed to refinance to shore up balance sheets amid the inevitable recession.

RBC Capital head of equities Karen Jorritsma noted that “refinancing rounds kick in thick and fast here” – citing Auckland Airport’s $1bn raise at a 12.6 per cent discount, Reece Plumbing’s $600m raise at a 12 per cent discount, Flight Centre raising $700m at a 27 per cent discount and Southern Cross trying for $170m at a 20 per cent discount.

“Our market is seeing a similar thematic to what our US desk in New York City has been reporting, deal flow picking up but volumes are down 20-30 per cent as the VIX subsides,” Ms Jorritsma said.

“Seems things are starting to normalise and the steering wheel is back in hand again. Saying that – scorched earth valuations are still being run across town … We are not out of the woods just yet. This might be OK for now, but the August reporting season could be the bloodbath of the decade.”

Across the rest of the region, China’s Shanghai Composite was closed for a national holiday but the Hang Seng was higher by 2.6 per cent and Japan’s Nikkei was lifting by 4.2 per cent at the local close.

The Aussie dollar was buying US60.42c, a 0.8 per cent lift from the last New York close.

To equities and energy was a standout despite talks between OPEC and its allies being delayed to later in the week. At the local close, Brent crude was down 4.3 per cent, but still higher from the same time on Friday.

The sector finished up by 6 per cent as Woodside added 6.4 per cent to $20.95, Santos jumped by 8.5 per cent to $4.33 and Origin rose by 4 per cent to $4.95.

Caltex finished 6.6 per cent higher to $24.51 as it brought forward the planned shutdown of its Lytton refinery while Oil Search trade was halted at $2.73 as the company completes a capital raise, believed to be around $500m.

In the major banks, Commonwealth Bank put on 3.9 per cent to $62.47, Westpac rose by 5.4 per cent to $16.35, ANZ put on 4.8 per cent to $16.54 and NAB finished higher by 5.4 per cent to $16.47.

Bank of Queensland lifted by 3.7 per cent to $5.07 ahead of its results on Wednesday – the first bank to report after the start of the pandemic.

To the miners, and restrictions on travel between states was the top issue, prompting Rio Tinto to relocate 700 workers to WA to beat the lockdown.

Shares in the miner finished higher by 1.6 per cent to $90.38 as BHP traded up 4.8 per cent to $31.79 and Fortescue put on 6.3 per cent to $11.22.

Those companies who raised capital last week led the sell-off – Webjet lost 8.9 per cent to $2.47 as NextDC gave up 4.6 per cent to $8.78 and IDP Education gave up 3 per cent to $13.40.

Even real estate bounced back – Scentre Group gaining 4.7 per cent to $1.69 as GPT Group put on 6.6 per cent to $3.74, Stockland added 4.2 per cent to $2.49 and Mirvac lifted by 5.5 per cent to $2.10.