Fortescue reaches new record on the back of iron ore price surge, Aussie dollar pops: Aus shares finish 1.1% higher

Market Reports

by Anna Napoli

The local sharemarket started the new month with a 1.1 per cent rally to finish at 5819 as iron ore miners pushed higher and banks bounced back from a weak start. Building material stocks also rose on reports of a new $20 000 grant for home buyers. The package is expected to be announced by the government later this week. Cement producer ADBRI was among the top performers in the S&P/ASX200 index with a 9 per cent gain, while Boral rose almost 8 per cent and CSR finished almost 4 per cent higher. The AFR is reporting buyers of newly constructed homes – whether home owners or first home buyers – will be offered grants of at least $20,000 to help shield the building industry from the coronavirus-induced economic slowdown.

Iron ore has surpassed USD$100 a tonne as supply concerns push the commodity higher sending Fortescue Metals Group (ASX:FMG) to a new record. c and Rio Tinto were also higher. Iron ore prices have rallied strongly on concerns about supply from Brazilian producer Vale as COVID-19 sweeps through the country.

Meantime, the Aussie dollar has surged above US67¢ to its best levels since mid-February. Gains come as the iron ore price continues to rise and as confidence for a recovery in the Chinese and Australian economies increases.

Futures market

Dow futures are suggesting a rise of 51 points.
S&P 500 futures are eyeing a lift of 3 points.
The Nasdaq futures are eyeing a jump of 7 points.
And the ASX200 futures are eyeing a 73 point gain tomorrow morning.

Local economic news

House prices across the nation fell an average of 0.4 per cent in May with five out of eight capital cities recording a fall in property prices for the month. Despite the broad based falls the damage to the property markets has been less than analysts expected.

Meantime, overall manufacturing activity was up slightly in May compared to April, but remains in “deep contraction” according to the AiGroup’s Performance of Manufacturing Index.
The PMI was up 5.8 points to 41.6 last month, following the biggest-ever monthly fall in the index’s history.

A result of 50 indicates stability, below it contraction, and above it expansion.

Broker moves

Citi has upgraded Bingo Industies (ASX:BIN) to buy from neutral and says waste volumes are expected to return to trend growth from the second half of FY21. Citi’s target price is $3.10. Shares in Bingo surged today finishing in the top 3 stocks up 7.2 per cent at $2.63.

Company news

Dexus (ASX:DXS) has reinstated its 2020 distribution guidance after withdrawing it in March due to the uncertainty of COVID-19.
Dexus expects an FY20 full year distribution per security amount that is consistent with last year. The FY19 full year distribution per security amount was 50.2 cents.
Shares in Dexus closed 2 per cent higher at $9.18.

The competition watchdog has upgraded its examination of Qantas’s (ASX:QAN) acquisition of a 19.9 per cent stake in smaller airline Alliance from a standard merger review to an enforcement investigation.

Shopping Centre owner, Vicinity (ASX:VCX) has launched a $1.4 billion capital raising as the company revealed a valuation hit of up to $2.1 billion on its assets.

Engineering company Monadelphous Group (ASX:MND)  has secured a number of new construction and maintenance contracts worth a combined $150 million.

And financial software provider Iress (ASX:IRE) is going cap in hand to investors to raise $170 million to fund the $107 million takeover of OneVue.

Best and worst performers of the day

The best performing sector was materials adding 3.1 per cent while real estate was the worst shedding 0.5 per cent.

The best performing stock in the S&P/ASX 200 is Austal (ASX:ASB) rose 9.3 per cent to $3.65 followed by shares in ADBRI (ASX:ABC) and Bingo industries (ASX:BIN)

The worst performing stock in the S&P/ASX 200was Platimum Asset Management (ASX:PTM) dropped 5.5 per cent to $3.77, followed by shares in Nearmap Global (ASX:NEA) and Southern Cross Media (ASX:SXL).

Asian markets

Japan’s Nikkei is 0.8 per cent higher Hong Kong's Hang Seng is 3.4 per cent higher and the Shanghai Composite is 2.2 per cent higher.

Commodities and the dollar

Gold is trading at US$1,743 an ounce.
Iron ore price is up 5.5 per cent to US$102.39
Iron ore futures are pointing to a rise of 4.5 per cent
Light crude is US$0.18 down at US$36.02 a barrel.
One Australian dollar is buying 67.52 US cents.