Australian shares rose on Tuesday, with the outlook for government and central bank support pushing the market higher while retail companies suffered, saying their operations were falling under Victorian restrictions to stop the pandemic’s growth.
The S&P/ASX 200 Index rose 111.5 points, or 1.9 per cent, to end the session at 6037.6, topping a positive lead from Wall Street that lifted the S&P 500 index 0.7 per cent.
But it was the technology-heavy Nasdaq Composite that again outpaced the broader market, rising at twice the pace of the top 500, gaining 1.5 per cent to set another record close.
The growth-stock momentum continued in local trade, with the technology sector delivering the best performance.
“Our markets been behaving a little bit out of sync with the US market in the last few days, so I think there’s been a bit of catch up,” said Credit Suisse strategist Damien Boey.
“And I think there’s a bit of optimism hanging around about the chances of US [government relief package] deal.
“At the end of the day, if it has to be done it will be done,” Mr Boey added, noting that policies have already started to expire from the earlier rounds of US fiscal support.
The S&P/ASX All Technology index rose 2.5 per cent as the buy now, pay later providers further advanced.
Openpay Group shares closed 20.3 per cent higher at $3.91 after telling investors its payment service would be offered to golf club operators through a partnership with enterprise software company MSL Solutions.
BNPL competitors also forged ahead, with Zip Co shares rising 8.8 per cent to $6.28, Sezzle shares up 8.3 per cent to $7.20, and market darling Afterpay Group climbing 6.5 per cent to $70.80.
The iron ore majors also drove the market higher: BHP shares closed 1.6 per cent higher at $37.92, Rio Tinto added 2 per cent to close at $105.10 and Fortescue Metals Group set another record higher after climbing 1.6 per cent to $18.16.
Producers of the steel-making input benefited from another 4.9 per cent rise in the price of iron ore overnight, which rose to a 12-month high of $US114.21 a tonne.
The banks recovered some of Monday’s steep declines, with the big four lenders rising between 2.3 per cent and 1.2 per cent in the session.
But as the lockdown and coronavirus spread in Victoria shakes confidence in the recovery, the Reserve Bank of Australia said it would return to bond buying after considering “a range of scenarios” at its monthly monetary policy meeting. The official cash rate was held at 0.25 per cent.
Victoria lockdown hurts retailers
The restrictions will force a number of listed retailers to close their Melbourne stores, including Wesfarmers’ Kmart and Target outlets; Premier Investments’ Just Jeans and Portmans; and JB Hi-Fi.
And while shares in JB Hi-Fi closed 1.2 per cent lower at $44.08, Premier Investments shares rose 1.7 per cent to $16.36 and Wesfarmers shares managed a 0.9 per cent gain, taking them to $46.29.
Baby Bunting, as well as building materials supplier Adbri told investors that their operations in the Melbourne area would continue. Baby Bunting shares rose 4.3 per cent to $3.62 and Adbri closed 1.8 per cent higher at $2.25.
“In barely six weeks, Australia has lurched from a state of COVID-19 control to a COVID-19 crisis. State borders have been closed for the first time in a century and Melbourne, a city of over five million people, is under strict curfew for six weeks,” said JPMorgan equity strategist Jason Steed.
“With COVID uncertainty still stalking NSW and VIC’s more aggressive restrictions only just implemented, we struggle to find grounds for optimism and thus have further scaled up the defensive allocations in our Model Portfolio.”
In reporting season price moves, shares in Pinnacle Investment Management jumped 10.2 per cent to $5.61 on the investment services firm’s full-year results and trading update.
Shares in Bunnings land owner BWP Trust closed 3.9 per cent higher at $3.98. The listed property investor announced a final distribution of 9.27¢ a security after reporting profit growth of 24.4 per cent for year.
Incitec Pivot shares rose 2.4 per cent to $1.93 after the fertilisers and chemicals producer released updated information on its current and expected performance.
Despite the increasing threat to the residential housing market as restrictions tighten, Tamawood shares rose 13.3 per cent to $2.90, after the home builder released its full-year results.
Follow the topics, people and companies that matter to you.
Did You See This CB Softwares?
37 SOFTWARE TOOLS... FOR $27!?Join Affiliate Bots Right Away
The Australian sharemarket fell 0.1 per cent on Friday as CSL, BHP and Commonwealth bank weighed on the index. Suncorp rallied 11 per cent. Westpac’s Bill Evans lifts 2020 and 2021 Australian dollar forecasts.
- Robert Guy, Vesna Poljak, Sarah Turner, William McInnes, Luke Housego and Tom Richardson