5th consecutive week of gains: Aus gain 4.5% over week

Market Reports

by Katrina Bullock

Despite today’s losses, the market finished the week 4.5 per cent higher. That’s the fifth consecutive week of gains for the ASX200. Investors are optimistic that the easing of covid-19 restrictions will signal an economic rebound. Austal (ASX:ASB) led the day, rising over 10 per cent after it upgraded its financial year 2020 earnings guidance.

At the closing bell the S&P/ASX 200 index closed 95 points, or 1.6 per cent lower to finish at 5,756.

Over the week the market added 259 points.

Futures market

Dow futures are suggesting a fall of 68 points.
S&P 500 futures are eyeing a dip of 15 points.
The Nasdaq futures are eyeing fall of 35 points.
And the ASX200 futures are eyeing a 109 point fall on Monday morning .

Economic news

The Reserve Bank of Australia released data showing that private sector credit growth was flat in April compared to the previous month, defying the market’s expectation of a 0.9 per cent rise. This comes after the 1.1 per cent increase we saw in March.

Broker moves

Credit Suisse has downgraded thermal coal-mining company New Hope Corporation (ASX:NHC) to a neutral with a 12 month price target of $1.50. The broker believes higher sales volumes were able to largely offset the impact of the weather and the ramp down of Acland in the latest quarter. However, it believes the investment case is tough particularly in light of the collapsed coal price. Shares in New Hope Corporation (ASX:NHC) are trading 8.2 per cent lower at $1.35.

Company news

Heavy industry engineering and construction company Lycopodium (ASX:LYL) has revised its NPAT guidance for the financial year ending 30 June down to $11.5 million. This updated guidance is in response to the ongoing impact of the Covid-19 pandemic on the global economy, which the company says is materially impacting the award and commencement of new projects. Shares in Lycopodium (ASX:LYL) are trading 2.6 per cent lower at $4.87.

Kip McGrath Education Centres (ASX:KME) have seen online lessons jump from 550 per week to 20,000 per week as a result of the pandemic.

New Zealand insurance company, Tower (ASX:TWR) has reported first half profit of $14.9 million after tax – that’s a $3 million improvement on the same period last year.

Toll road operator, Atlas Arteria (ASX:ALX) has successfully completed its $420 million equity raising.

Software solutions provider, Gentrack Group (ASX:GTK) has seen a 78 per cent decline in EBITDA to $4.3 million for the half-year to 31 March 2020, compared to the prior corresponding period.

Best and worst performers of the day

The best performing sector was Consumer Staples adding 0.7 per cent while the worst performing sector was Financials, shedding 3.6 per cent.

The best performing stock in the S&P/ASX 200 was Austal (ASX:ASB), rising 10.2 per cent to close at $3.34. Shares in Northern Star Resources (ASX:NST) and Clinuvel Pharmaceutical (ASX:CUV) followed higher.

The worst performing stock in the S&P/ASX 200 was Virgin Money UK (ASX:VUK), dropping 10.2 per cent to close at $1.80. Shares in New Hope Corporation (ASX:NHC) and Westpac (ASX:WBC) followed lower.

Asian markets

Mixed:Japan’s Nikkei has lost 0.2 per cent, Hong Kong’s Hang Seng has lost 0.6 per cent and the Shanghai Composite has gained 0.1 per cent.

Wall Street

Wrapped up our four trading days this week higher: The Dow Jones added 3.7 per cent, The S&P 500 added 2.7 per cent and the tech heavy Nasdaq gained 0.5 per cent.

Commodities and the dollar

Gold is trading at US$1,718 an ounce.
Iron ore price rose 1.8 per cent to US$97.09. Its futures are pointing to a rise of 3.9 per cent.
Light crude is US$0.65 lower at US$33.84 barrel.
One Australian dollar is buying 66.51 US cents.