Wall St jumps as tech twinkles: ASX to rise

Market Reports

by Melissa Darmawan

The Australian share market is to rise following Wall St’s rally with all three indexes closed in the black. Technology shares and companies linked to the reopening of the economy climbed amid easing of restrictions, as the US clocked their lowest number of covid-19 cases since the pandemic. Investors’ concerns on inflation eased following the White House tapering down President Joe Biden’s US$2.25 trillion infrastructure proposal to US$1.7 trillion last Friday. Flight stocks took-off with American Airlines up 1.8 per cent while United added 1.5 per cent. Cruise line companies spiked while investors await President Joe Biden, who is set to sign a bill to allow operations to resume in Alaska. Elsewhere, European markets closed higher amid a public holiday as investors mull on the comment last Friday from the President of the Central Bank, Christine Lagarde after the policymaker said “it’s far too early” to discuss winding down its emergency bond purchase scheme. On the commodities front, oil prices rose over 3 per cent on news that global demand could absorb any increased output from Iran due to the pace of the vaccine roll-out. Gold prices rose while the price of iron ore fell over 6 per cent as Chinese authorities keep tabs on commodity prices. Meanwhile, investors ponder on US Federal Reserve Lael Brainard’s comment after the Governor said the bank “is stepping up its research and public engagement on a digital version of the U.S. dollar”.

Figures from around the globe

Wall Street closed higher yesterday: The Dow Jones Industrial Average gained 0.5 per cent to 34,394, the S&P 500 added almost 1 per cent to 4,197 and the NASDAQ closed 1.4 per cent higher at 13,661 points.

European markets closed higher: London’s FTSE gained 0.5 per cent, Paris added 0.4 per cent and Frankfurt was closed.

Asian markets closed mixed: Tokyo’s Nikkei added 0.2 per cent, Hong Kong’s Hang Seng fell 0.2 per cent while China’s Shanghai Composite closed 0.3 per cent higher.

ASX futures

Taking all of this into equation, the SPI futures are pointing to 0.3 per cent gain.

ASX 200

Yesterday the Australian share market closed 0.2 per cent or 15.6 points higher at 7,046 to close the session with a broad-based advance with Materials as the outlier while Consumers Staples closed flat. The index struggled to find direction though banks helped with Westpac (ASX:WBC) up 1.72 per cent while CBA (ASX:CBA) reset fresh record highs to close firmer by 0.72 per cent. Heavyweight miners drilled into the red as iron ore prices continued to fall with Fortescue Metals (ASX:FMG) down 4.17 per cent followed by Rio Tinto (ASX:RIO) shed 2.1 per cent with BHP (ASX: BHP) closing lower. The best performing stock was Kogan (ASX:KGN) soared 14.7 per cent as it reversed its losses from a heavy sell-down on Friday following its revised earnings forecast. The worst performing stock was Oz Minerals (ASX:OZL) shed 4.6 per cent. Gold miners also rose with Newcrest Mining (ASX:NCM) up 2.7 per cent after the safe-haven commodity traded at five-month highs. On the earnings front, Aristocrat Leisure’s (ASX:ALL) first half net profit fell 73.5 per cent with revenue shed 1 per cent and declared an interim dividend of 0.15, they closed 0.12 per cent higher.

Local economic news

Today is big data day with the ABS is to release the preliminary April figures on international trade in goods, the weekly payroll jobs and wages report for week ending May 8 and also a new publication called measuring non-discretionary and discretionary inflation is due. ANZ-Roy Morgan is to issue the weekly consumer sentiment report as well.

Earnings season & AGMs

Technology One (ASX:TNE) is due to release half year profit results today while Alumina (ASX:AWC) and Freedom Foods (ASX:FNP) are set to hold their AGM’s today.

Stockwatch

Our weekly stock to watch this week is biotech company CSL (ASX:CSL). David Thang, Senior Private Wealth Adviser at Sequoia (ASX:SEQ) rates CSL as a buy. From a technical angle, CSL is bullish for a number of reasons. Before I go into it, we are using a long term chart with each candle representing one month’s worth of trading. On the grey horizontal line, support was around the $242 mark in March and at the end of that month, a bullish doji formed suggesting an emerging positive sentiment. If you look at the horizontal dashed line, the break of $273.80 in both April and May signals upward traction with accelerated momentum indicating a continuous uptrend. Now should this bullish case unfold, the next range is between $304.26 and $321.19 if you look at the green line (this is made up of the 61.8 per cent and 78.6 per cent Fibonacci retracement). The purple line which looks like a moving average is actually the ‘forward 12-month median analyst valuation, which shows a target price of $312.50. Shares in CSL (ASX:CSL) closed 1.75 per cent higher at $289.27 yesterday.



IPOs

We have two companies penciled in, Pepper Money (ASX:PPM) with an expected market capitalization of $1.3 billion joined by banking and financial services company BSP Financial (ASX:BFL).

Ex-Div

Amcor PLC (ASX:AMC) is paying 15.12 cents unfranked.

Currencies

One Australian Dollar at 7:40 AM was buying 77.56 US cents, 54.80 Pence Sterling, 84.36 Yen and 63.50 Euro cents.

Commodities

Iron Ore has lost 4.1 per cent to US$192.42.
Iron Ore futures suggest a 0.3 per cent gain.
Gold has added $7.80 to US$1887 an ounce.
Silver has gained $0.42 to US$27.91 an ounce.
Oil has gained $2.47 to US$66.05 a barrel.
 

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