Triple boost lifts ASX to fresh record high

Strength in offshore markets, solid earnings and increased bets of further monetary stimulus all combined for a triple boost.

Qantas assisted Australian evacuees from the coronavirus-struck cruise ship Diamond Princess. Picture: AAP

Strength in offshore markets, solid earnings and increased bets of further monetary stimulus all combined for a triple boost on Thursday to push shares to new record highs.

The benchmark S&P/ASX 200 soared to a high of 7197.2 in midday trading, smashing the previous record of 7145.7 after weakness in the latest labour data.

Unemployment for the month rose to 5.3 per cent and prompted a lift in Reserve Bank of Australia (RBA) cash rate cut probabilities - market implied odds of a 25bps cut in May are now at 43 per cent, from 35 per cent on Wednesday.

The rally in equities had mellowed somewhat by the close, with shares finishing higher by 17.9 points, or 0.25 per cent, to 7162.5 while the All Ordinaries added 18 points, or 0.25 per cent, to 7255.2.

But the Aussie dollar was still taking a battering, down 0.5 per cent against the US dollar at the local close to US66.43c.

UBS economist George Tharenou pointed out that year-on-year jobs growth slowed to its worst read since April 2017, underutilisation spiked to its highest since April 2018 and the rise in unemployment was the largest month-on-month rise since January 2016 - all before the significant impact of the coronavirus.

“Given first quarter GDP is likely negative, we still expect unemployment to lift further to 5.5 per cent in coming quarters,” Mr Tharenou said.

“Given the (expected) lack of fiscal stimulus ahead, we reiterate our view the RBA will cut 25bps in April (albeit conditional on the rise in unemployment at least being maintained) and again to 0.25 per cent in August (still conditional on global central bank easing).”

Safe haven assets such as the Japanese yen and gold all saw plenty of buying over the session, while Commonwealth 10-year bond yields dropped by as much as 5 basis points.

Local earnings dominated headlines through the day - led by Qantas which said the coronavirus would dent its full-year profit by $150m. The airline said it was slashing its flights to Asia, but still, shares in the group were some of the best performers, adding 5.9 per cent to $6.67.

Coca-Cola Amatil celebrated its first revenue growth in seven years, helping shares up 8.6 per cent to $13.07 while Perpetual put on 11.2 per cent to $47.27 as it conceded that a purely value-based approach wasn’t paying off.

In the major banks, CBA finished virtually flat, up just 0.02 per cent at $87.85, Westpac edged up by 0.3 per cent to $25.69, NAB rose by 0.3 per cent to $27.40 and ANZ outperformed with a 1 per cent lift to $27.03.

Major miners pushed higher. BHP added 2c to $38.52, Fortescue jumped 1.8 per cent to $11.34 to add to Wednesday’s rally on its results, while Rio Tinto edged higher by 0.05 per cent to $98.14.

Iluka Resources surged 6.4 per cent to $10.03 after making its first moves to spin off its iron ore royalties stream.

Energy names cheered a 2 per cent jump in oil prices overnight, after the US applied sanctions to Russian state firm Rosneft for its involvement with Venezuela’s state run oil firm.

Woodside put on a tiny 0.06 per cent to $33.25, while Origin added 1.8 per cent to $7.97 even as it warned that outages and price regulations had dragged on its results while Santos stepped back by 1.2 per cent to $8.07 with a profit dip at its half-year results, as it said it expected a decision on its Narrabri CSG project by June.

Star Entertainment boasted a boost in VIP turnover, but that wasn’t enough to stop a profit slide. Despite that, shares put on 4.6 per cent to $4.33.

Medibank used its results to call for greater healthcare reform - shares in the insurer fell 2 per cent to $2.92.

WiseTech was the worst performer on the top 200 following on from a profit warning at its results on Wednesday and as analysts raised concerns on its hurried acquisition strategy. Shares closed lower by 11.8 per cent to $18.88.