Tech leads, gold shines as oil falls: ASX closes 1.2% higher

Market Reports

by Melissa Darmawan

Text-only (non-video) report.

The Australian share market rallied throughout the session to close in the black. The index’s rebound from its plummet yesterday clawed back most of its losses to climb above 7,000 points. All sectors advanced bar Materials closed 0.4 per cent lower while the Energy sector closed flat. Technology and banking stocks powered ahead with Afterpay (ASX:APT) crossed the finish line as the best performing stock up 7.6 per cent while Commonwealth Bank (ASX:CBA) took the spotlight against its peers, added 3.2 per cent to reset a new record high. Travel stocks closed mixed with Qantas (ASX:QAN) up 3.5 per cent as the flying Kangaroo announced job cuts and reduced sales commission payments while Sydney Airport (ASX:SYD) kept up and clocked a gain of 3 per cent. Though online travel agents Helloworld (ASX:HLO) flew into the red down 3.1 per cent with Flight Centre (ASX:FLT) dived 2.4 per cent with its mate Webjet (ASX:WEB) skid 0.85 per cent. Gold miners rebounded with Regis Resources (ASX:RRL) sparkled up by 2 per cent followed by Northern Star Resources (ASX:NST) and Newcrest Mining (ASX:NCM) following the precious metals price which tipped a 4.5 month high yesterday, though gave up its gains on the release of the minutes from the US Federal Reserve. The worst performing stock was forensic data software company Nuix (ASX:NXL) as they reversed their gains from Tuesday’s high down 6.8 per cent. To heavyweight miners which closed lower as the futures point to a 5.3 per fall with BHP (ASX:BHP) shed over 1 per cent with Rio Tinto (ASX:RIO) down 0.5 per cent followed by Fortescue Metals (ASX:FMG). At the closing bell, the S&P/ASX 200 was 1.27 per cent or 87.90 points higher at 7019.60.

Futures

The Dow Jones futures are pointing to a fall of 6.00 points.
The S&P 500 futures are pointing to a fall of 0.75 points.
The Nasdaq futures are pointing to a fall of 9.25 points.
The SPI futures are pointing to a rise of 85 points when the market next opens.

Local economic news

Australian Bureau of Statistics released labour force figures for April with the unemployment rate at 5.5 per cent from 5.7 per cent to achieve a 13-month low. Employment fell by 30,600 in April against economist’s expectations of a 10,000 + rise yet full-time jobs rose by 33,800 with part-time jobs down by 64,400. The mixed results was led by the participation rate fell from 66.3 per cent in March to 66.0 per cent in April. The end of the JobKeeper wage subsidy did not have a discernible impact on employment between March and April.

Company news

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Agricultural company Nufarm (ASX:NUF) reports a 20 per cent rise in revenue in their first half for FY21 with their EBITDA jumped 118 per cent compared to same period a year ago.

Australia’s national flag carrier Qantas (ASX:QAN) provided a full-year outlook suggesting the company is projected to record a loss of over $2 billion for FY21 due to pandemic restrictions.

Gold player Evolution Mining (ASX:EVN) has finalised the transaction for the takeover of Battle North Gold for $366 million, following the successful completion of a scheme of arrangement.

Service stations operator Ampol (ASX:ALD) has joined forces with US innovation giant Tesla to accelerate its transition towards green energy.

Beacon Lighting (ASX:BLX) predicts its net profit after tax to hit between $35.5 million to $37.5 million nearly doubling the $20.4 million underlying NPAT from last year.

Broker Moves

Credit Suisse rates United Malt Group (ASX:UMG) as a neutral with a target price of $4.58. The downgrade from outperform follows the company’s first half results which performed ahead of guidance driven by stronger volume recovery which in turn absorbed $7m in non-recurring costs. The broker is positive in respect to the market recovery and determines a low risk view in demand recovery across North America and the United Kingdom. Though the broker sees lockdowns in Asia potentially impacting exports. Despite the strong results, the broker reduced its rating to neutral from outperform due to a strong rise in the share price from March lows raising its target price from $4.21 to $4.58. Shares in United Malt Group (ASX:UMG) closed 0.22 per cent higher at $4.50.

Macquarie rates Afterpay (ASX:APT) as an outperform with a target price of $120. The upgrade from neutral follows a buy now pay later survey in the US where the broker observed limited brand loyalty among its peers. The results estimated that 70 per cent of users would prefer to sign up with a different BNPL rather than switch stores. The broker believes this increases the importance of having a large two-sided network of merchants/users of which Afterpay ranks the highest among its peers. The survey results noted the terms of brand perception with PayPal ranked first followed by Affirm then Afterpay. The broker upgrades its rating from a neutral and retains its target price at $120. Shares in Afterpay (ASX:APT) closed 7.67 per cent higher at $93.10.

Best and worst performers

The best-performing sector was Information Technology, up 4.31 per cent. The worst-performing sector was Materials, down 0.42 per cent.

The best-performing stock in the S&P/ASX 200 was Afterpay (ASX:APT) closing 7.67 per cent higher at $93.10 followed by shares in Altium (ASX:ALU) and Redbubble (ASX:RBL).

The worst-performing stock in the S&P/ASX 200 was Nuix (ASX:NXL) closing 6.83 per cent lower at $3.41 followed by shares in Iluka Resources (ASX:ILU) and Elders (ASX:ELD).

Commodities and the dollar

Gold is trading at US$1874.63 an ounce.
Iron ore is 3.70 per cent lower at US$216.16 a ton.
Iron ore futures are pointing to a fall of 5.30 per cent.
Light crude is trading $0.28 higher at US$61.80 a barrel.
One Australian dollar is buying 77.52 US cents.
 

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