ASX 200 fuels up for another challenge at the 11-month highs

January 21, 2021 - 1 month ago
Share on twitter
Share on facebook
Share on linkedin
Share on email

Thursday’s price action witnessed the ASX bulls reclaim the 6,800 thresholds for the first time since late February, as the inauguration of U.S. President Joe Biden lifted expectations for a return to a stable global trade environment and government stimulus.

Former President Donald Trump left office on Wednesday, as President Joe Biden took the oath of office to become the 46th U.S. president and Vice President Kamala Harris was sworn in as the first female in U.S. history.

Investors took comfort the new president took office safely after outgoing president Donald Trump’s supporters attacked the U.S. Capitol earlier this month.

At the closing bell, the benchmark S&P/ASX 200 index rose +53.3 points, or +0.79%, to 6,823.7, leaving the benchmark 5.2% below the record high set-in mid-February last year at 7,197.20.

Meanwhile, the All Ordinaries closed higher +56.1 points, or +0.80%, at 7,107.1.

At the finishing bell on Wednesday, on the New York Stock Exchange (NYSE), the broad-based Standard & Poor’s 500 Index gained +52.94 points, or +1.39%, to 3,851.85, topping its previous all-time high set earlier this month.

According to news sources, the S&P 500’s gain was the best on any Inauguration Day since the start of Ronald Reagan’s second term.

The Dow Jones Industrial Average, Nasdaq composite also notched record highs, fuelled by gains in technology, communications, health care and most other sectors.

The Dow Jones Industrial Average rose +257.86 points, or +0.8%, while the rich-tech Nasdaq Composite jumped nearly +260.07 points, or +1.97% respectively.

Back home, the picture for earnings in Australia also firmed with the latest labour force report supporting expectations of a quick return to pre-pandemic activity.

Australia’s jobless rate ticked lower to 6.6% in December to hit the lowest level since April versus expectations for a decline to 6.7% from November’s 6.8%, according to the Australian Bureau of Statistics (ABS).

A sizeable portion of the jobs added was in part-time employment at 14.3k versus 35.7k full-time jobs following December’s 84.2K.

The data released is not expected to shift the Reserve Bank of Australia (RBA) dovish bias.

The central bank kept its cash rate unchanged at a record low of 0.1% in December and reiterated its promise to do more easing if necessary.

Technology continued to lead the local sharemarket higher with the buy now, pay later sector driving the gains.

The bulls haven’t letup on Afterpay as Thursday’s rally adds +5.67%, to post (yet) another record close, at $149.00, while US-based Sezzle advanced +7.3%, and settled at $7.31.

Zip Co shares soared +23.1%, to $7.36 after a second-quarter update showed an +88% increase in revenue compared with the year-earlier period.

The Financial sector lifted the ASX also, with National Australia Bank Group taking the lead from the “Fab Four” (banks) after rising +1.63%, and closed at $24.30, Australia and New Zealand Banking Group added +1.14%, to $24.71, with Westpac Banking Corp advanced +1.11% to $21.82, while Macquarie Group added +0.73%, to settle at $139.45.

Besides Information Technology and Discretionary, the materials sector had the most notable rise of +1.06%, as our local major miners lifted the index, with Rio Tinto leading the titans higher after rising +1.74% to $121.88, while BHP Group rose +1.56% to $47.02, and Fortescue Metals Group added +0.16% to $24.87.

Meanwhile, South32 shares eased -0.4%, to $2.66 despite warning investors of cost pressures, and Alumina shares fell -1.9%, to $1.77.

As for our oil and gas producers, Woodside shares slid -1.64%, to $26.95 amid sector weakness and a fourth-quarter report that featured a -2% slump in production for the prior period.

Oil Search slipped -0.22%, to $4.44, Origin Energy added +1.16%, to $5.23, AGL Energy and Santos ended flat at $11.86, and $7.40, respectively.

Link Administration added +1.5%, to close at $4.81 after it reported first-half operating earnings before interest and tax of $79 million. Investors had previously been told to expect $77 million.

Vicinity Centres securities lost -2.5%, to $1.545 after the shopping centre landlord advised investors that its portfolio of properties fell in value.

The 60 directly-owned retail assets in its portfolio, including CBD exposures, were revalued lower by -4% to $570 million news sources reported.

Cleanaway Waste Management fell -8.5%, to $2.38 after announcing that chief executive Vik Bansal will step down after five years in the role.

In other news, Queensland announced it would relax Greater Brisbane restrictions after a tenth day without local COVID-19 transmissions.

New South Wales and Victoria also recorded zero locally acquired cases.

Meanwhile, our local currency, the Australian dollar is currently buying US$0.7768 (as of writing).

Share on twitter
Share on facebook
Share on linkedin
Share on email

Leave a Reply