Iron ore miners and Metcash rally: ASX closes 0.6% higher

Market Reports

by Anna Napoli

The local sharemarket has advanced for its fifth straight session as strong iron ore prices lifted the mining sector and Metcash jumped by over 10 per cent on strong first half results. The S&P/ASX200 rose 41 points or 0.6 per cent to 6675. The local bourse hit a nine-month high in early trade before pulling back in intraday trading. Shares of Australia’s top iron ore miners surged higher with Fortescue Metals Group hitting a record high of $21.39. Tech also performed strongly with Xero up 4.16 per cent after a broker note and Afterpay rising 2.2 per cent after positive comments by the Reserve Bank Governor about the BNPL sector. But it wasn’t all good news Ratings agency, S&P has downgraded both NSW and Victoria’s credit ratings based on weaker fiscal outlook. NSW’s long-term issuer credit rating fell one notch to AA+/Stable from AAA/Negative.

Futures

The Dow futures are suggesting a fall of 62 points. S&P 500 futures are eyeing a fall of 9 points. The Nasdaq futures are eyeing a drop of 10 points. And the SPI futures are eyeing a rise of 28 points tomorrow morning. Economic news China's exports grew by 21 per cent year-on-year in November, pushing its trade surplus to $US75.42 billion. Economists had expected year-on-year export growth in US dollar terms of 12 per cent.

Broker moves

Goldman Sachs has commenced coverage of Xero (ASX:XRO) with a buy rating, arguing the provider of cloud-based accounting software has a "mutli-decade runway" for strong revenue growth. Shares in Xero (ASX:XRO) closed 4.16 per cent higehr to $138.43.

Company news

ASIC has commenced civil proceedings in the Federal Court against iSignthis and its managing director John Karantzis. The proceedings allege breaches by the company of its continuous disclosure obligations and allege false and misleading representations under the Corporations Act. Shares in isignthis last traded $1.07.

Westpac (ASX:WBC) will sell its Pacific businesses – Westpac Fiji and Westpac’s 89.91% stake in Westpac Bank PNG Limited – to Kina Securities for up to $420 million.

Infratil will do a six-month strategic review of its 65 per cent stake in Tilt Renewables after receiving inquiries about its investment in the wind farm operator, opening up the prospect of a takeover. Metcash’s (ASX:MTS) profit has bounced back from a loss of $151.6 million for the first half of last financial year to $125.1 million profit for the first six months of FY21. IPO’s Biotech company Control Bionics commenced trading on the ASX today. It issued at 60 cents opened at $1.12 and closed at $1.18.

Best and worst performers

The best-performing sector is materials gaining 1.5 per cent while the utilities sector was the worst shedding 0.7 per cent. The best performing stock in the S&P/ASX 200 was Metcash rising 10.3 per cent to $3.55 (ASX:MTS)  followed by shares in Sims  (ASX:SGM) andG8 Education (ASX:GEN) The worst performing stock in the S&P/ASX 200 was IDP Education (ASX:IEL) dropping 4.9 per cent to $21.37 , followed by shares in IPH  (ASX:IPH) and Perseus Mining (ASX:PRU).

Asian markets Lower

Japan’s Nikkei has lost 0.5 per cent Hong Kong’s Hang Seng has shed 1.5 per cent and the Shanghai Composite has lost 0.5 per cent.

Commodities

Gold is trading at US$1,841 an ounce.
Iron ore has gained 5.8 per to $145.01.
Iron ore futures are suggesting a gain of 3.3 per cent.
Light crude has shed $0.07 cents to $45.56.
One Australian dollar is buying 74.30 US cents.

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