Federal cabinet plans to ease covid restrictions: Aus shares close 0.5% higher

Market Reports

by Katrina Bullock

The Australian share market ended the day 0.5 per cent higher after the Federal government announced a plan to have most of the economy reopened by July. The plan, which state and territory leaders will implement at their discretion will see playgrounds, restaurants and community centres reopen first. Each phase will be separated by a cooling-off period, to allow health experts to observe the impact of the changes on infection risk. Treasurer Josh Frydenberg today announced that the reforms recommended by the Banking Royal Commission will be delayed by six months to allow the banks to focus on the coronavirus crisis.

S&P/ASX 200 index 

At the closing bell the S&P/ASX 200 index closed 27 points higher to finish at 5,391.

Over the week, the market has gained 145 points or 2.7 per cent. The Infotech sector was the star performer rising almost 12 per cent over the week.

Futures 

Dow futures are suggesting a rise of 296 points.
S&P 500 futures are eyeing a rise of 36 points.
The Nasdaq futures are eyeing a lift of 111 points.
And the ASX200 futures are eyeing a 24 point rise on Monday morning.

Economic news

The Reserve Bank of Australia released its quarterly monetary policy statement. The RBA expects the economy to contract by 8 per cent in the year to the end of June, before recovering throughout the second half of the year. It warned that Australia’s gross domestic product may contract by up to 10 per cent, that unemployment may reach 10 per cent by the middle of the year and that it could still be sitting at 9 per cent coming into Christmas. The RBA reaffirmed its commitment not to increase the cash rate target until progress has being made towards full employment, and inflation is sustainably sitting within the 2–3 per cent target. Its projections assumed that most restrictions would be lifted by the end of the September quarter and that international border closures would continue until the end of the year.

Broker moves

Credit Suisse rates biotech company CSL (ASX:CSL) as an outperform with a 12 month price target of $329.00. The broker believes sales of the company’s blood clotting therapy, Idelvion, will peak in the 2023 financial year at US$630 million; with modest declines thereafter as competing therapies enter the market. In a bear case scenario, the broker envisages a 3 per cent downside risk to forecasts in the outer years. Shares in CSL (ASX:CSL) closed 2.2 per cent lower at $301.18.

Company news

Media giant, News Corporation (ASX:NWS) has reported a net loss of around $1 billion for the third quarter, a far cry from the $23 million income we saw in the third quarter of 2019. The loss is largely attributed to the $1.1 billion impairment charges related to a write-down of at Foxtel and the reclassification of News America Marketing to assets held for sale.

Telstra (ASX:TLS) has also signalled that it expects a $300 million impairment in its FY20 results due to its 35 per cent stake in Foxtel.

Investment bank and financial services company, Macquarie Group (ASX:MQC) has slashed its final dividend in half after reported an 8 per cent drop in net profit compared to the previous year.

Infotech product distributor, Dicker Data (ASX:DDR) has successfully completed its $50 million institutional placement.

Best and worst performers of the day

The best performing sector was the Consumer Discretionary sector adding 2.2 per cent while the worst performing sector was Healthcare, shedding 1.7 per cent.

The best performing stock in the S&P/ASX 200 was AP Eagers (ASX:APE), rising 9.9 per cent to close at $5.01. Shares in Webjet (ASX:WEB) and Flight Centre Travel Group (ASX:FLT) followed.

The worst performing stock in the S&P/ASX 200 was Iluka Resources (ASX:ILU), dropping 3.8 per cent to close at $7.30. Shares in Alumina (ASX:AWC) and Clinuvel Pharmaceuticals (ASX:CUB) followed lower.

Asian markets

Are all higher: Japan’s Nikkei has added 2.5 per cent, Hong Kong’s Hang Seng has added 1.1 per cent and the Shanghai Composite has gained 0.8 per cent.

Wall Street

Wrapped up our four trading days this week higher: The Dow Jones added 0.6 per cent, The S&P 500 added 1.8 per cent and the tech heavy Nasdaq gained 4.2 per cent.

Commodities and the dollar

Gold is trading at US$1,719 an ounce.
Iron ore is trading flat at US$84.35.
It’s future are pointing to a rise of 2.4 per cent.
Light crude is US$1.14 higher at US$25.97 a barrel.
One Australian dollar is buying 65.27 US cents.