Thanks for reading along with us at Markets Live today, and for joining us during the first week of the year.
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Strong commodity prices and the prospect of a stimulus boost for the US economy gave Australian shares a strong start to 2021 and pushed the ASX to its highest close in 11 months.
The local benchmark jumped another 0.7 per cent on Friday to finish at 6757.9 points – its best close since last February – with Afterpay, CSL and the major banks among the major drivers.
The ASX 200 added 2.6 per cent to record its best week since early November, with mining and energy stocks driving gains on improved oil and iron ore prices.
The bulk metal rose another 1.8 per cent before trade on Friday to reach $US171.69 a tonne. Oil also climbed further on the promise of Saudi production cuts.
Meanwhile, investors continue to price in the prospect of unfettered Democrat control of US Congress.
The Blue Wave victory in both Georgia Senate run-off seats has effectively handed the party control of all three major organs of the US government and opened the door for a larger stimulus response to the coronavirus.
Novus Capital Senior Client Adviser Gary Glover said there was a seasonal element to the year-opening bonanza for ASX investors with the Santa Rally usually continuing into January.
But he is also among the investors who remain cautious that the initial equities rush will fade once Joe Biden’s policy agenda – and his tax and regulatory reforms – become clearer.
“It’s a mixed bag really – dual control means Biden will get more done and get the stimulus package out more quickly,” Mr Glover said.
“But markets might also be a bit more nervous longer-term about tightening regulations and what it means for tax… which will probably affect the big tech companies also”.
Mr Glover said markets appeared to be riding an “irrational” wave of momentum in the face of high valuations and an uncertain macro outlook.
“You can see there’s a reckoning that is going to come, but when will it come?
“There have been times when the market has been irrational, but I can’t remember a time when they have been irrational for this long.”
The materials sector added 6.6 per cent for the week but the iron ore and gold producers cooled their jets on Friday.
BHP backed away from a record high to finish 0.5 per cent lower at $46.67, while Rio Tinto dropped 1.3 per cent to $124.01, and Fortescue Metals shed 2.2 per cent to $25.34.
The lenders were strong in the final session of the week, with Commonwealth Bank gaining 1.2 per cent to $85.63, NAB up 1.4 per cent to $23.35, Westpac 1.5 per cent higher at $20.28, and ANZ rising 0.9 per cent to $23.84.
Afterpay rose 6.6 per cent to $116 and biotech CSL rose 1.9 per cent to $280.25.
The ASX 200 finished the first week of the year with a gain of 0.7 per cent to 6757.9. The banks, tech stocks, health, and energy firms were strong on Friday, while consumer discretionaries also rose. Mining stocks cooled off
The index added 2.6 per cent over the course of the week – its best in eight – to claim its best close in nearly 11-months.
Here were Friday’s biggest movers:
Strong commodity prices and expectations of a heftier US stimulus package have pushed the Australian sharemarket towards its best week since early November.
The local benchmark was up 0.5 per cent at 6742 with about an hour to go Friday, having followed Wall Street higher at the open.
So far, the ASX 200 is up 2.4 per cent for the week, which would be its best performance in eight weeks.
The index was flirting with an 11-month high when it rose to a peak of 6748.1. It reached an intraday high of 6765.7 on December 18, the best since February 2020.
The materials sector was subdued on Friday but has been one of the strongest performers this week with a gain of more than 6 per cent. The energy sector has also been strong as oil prices lift on promised Saudi oil cuts, adding more than 7 per cent for the week.
Tech stocks and the banks are gaining on Friday.
US futures markets were up by between 0.3 per cent and 0.5 per cent on Friday afternoon AEST and hint at further gains on Wall Street tonight.
Hyundai Motor Co. shares surged more than 20 per cent in Seoul after a report said that Apple Inc. was in talks with the automaker to cooperate on developing self-driving electric vehicles.
The report by a cable TV unit of Korea Economic Daily said that the two companies were currently negotiating terms, but didn’t elaborate on where it obtained the information. Internal discussion on the project was complete at Hyundai, awaiting the approval of the chairman, it said.
Hyundai and Apple both declined to comment on the report to Bloomberg News.
Apple will take at least half a decade to launch an autonomous, electric vehicle with development work still at an early stage, people with knowledge of the efforts have told Bloomberg News.
The local tech sector has followed the Nasdaq higher to lead gains for the ASX on Friday and snap a two-session decline.
The tech sector was up by a collective 1.9 per cent as the ASX held on to a 0.3 per cent lead at 1.50pm AEST.
Tech stocks fell by 3.5 per cent on Wednesday and 2.9 per cent on Thursday.
The so-called WAAAX contingent was mixed, though $31 billion buy now, pay later firm Afterpay has pulled ahead by 5.9 per cent to reclaim its losses from yesterday.
Shares in the company were last $115.32, having started the day at $108.85.
Accounting software firm Xero was up 1 per cent at $141.89, while NEXTDC jumped 2.3 per cent to $12.14, and Bravura solutions jumped 1.2 per cent to $3.
Altium shed 1.3 per cent to $31.30, Appen dropped 0.8 per cent to $23.55, and Wisetech Global fell 0.8 per cent to $28.37.
Shares in diversified miner IGO Limited were down 0.9 per cent even after China’s Tianqi Lithium received shareholder approval to sell the ASX-listed firm a stake in Australia’s top lithium mine.
Battery metals company Tianqi was on January 5 given the green light for the transaction with IGO, with 99.97 per cent of shareholders voting in favour of the deal.
“The resounding vote of support which Tianqi has received from its shareholders further validates the value creation from this transaction for the shareholders of both companies,” Peter Bradford, IGO’s Managing Director and CEO said.
In December it was announced Tianqi would be selling IGO a 25 per cent stake in the Greenbushes mine in Western Australian and a 49 per cent per cent stake in its lithium hydroxide plant near Perth for a combined $1.9 billion.
Shares in the $5.7 billion IGO fell 0.9 per cent to $7.50 on Friday but have still gained more than 17 per cent this week. The company’s share price rose 3.3 per cent in 2020.
IGO on Friday also advised that the strategic review of the company’s 30 per cent interest in the Tropicana Operation is ongoing.
The iron ore giants and gold miners were subdued on Friday and set to slide into the weekend after an otherwise strong start to 2021.
BHP, Rio Tinto and Fortescue Metals – which each hit fresh records on Thursday – slipped into the red at the start of trade to keep gains in check for the wider ASX 200.
BHP was last 0.2 per cent lower at $46.79, Rio fell 0.8 per cent to $124.65, and Fortescue Metals down 1.8 per cent to $25.46. The drop comes after the trio surged to new record highs on Thursday.
The mining sector has strongly outperformed the local sharemarket in the first trading week of the year thanks to improved iron ore prices and a gold price that remains above $US1900 per ounce.
Iron ore improved again overnight, adding 1.8 per cent to $US171.69 a tonne.
For the gold miners on Friday, Newcrest was 1.4 per cent lower at $27.20, Northern Star fell 1.1 per cent to $13.15, Evolution dropped 1.7 per cent to $4.97, and 0.6 per cent to $4.97.
Rare earths miner Lynas was, however, on the rise.
The firm added 0.2 per cent to $4.60 by 12.50pm AEST and earlier touched a new seven-and-a-half year high of $4.68.
It has added more than 15 per cent this week and more than quadrupled in price since falling to a low of $1.04 in March 2020.
The Australian sharemarket pushed ahead in late morning trade to move within touching distance of an 11-month high.
The ASX 200 was 0.4 per cent ahead at 6739.2 at lunchtime, and earlier rose 0.5 per cent to a peak of 6747.6 as the banks and tech stocks gained ground and the iron ore giants trimmed losses.
The market rose to an intraday high of 6765.7 on December 18 – its highest since February 2020 when it was plummeting from a record high amid the onset of the coronavirus.
Novavax, the Nasdaq-listed biotechnology company that has seen share price gains of more than 2400 per cent over the past year, has sealed its deal with the Australian government for 51 million doses of its COVID-19 vaccine.
The Maryland-based business told investors on Thursday evening US time that it will start working with the Therapeutic Goods Administration on approval for the doses. The vaccine is still in phase 3 trials in the US and Mexico.
Executive Vice President, Chief Commercial Officer and Chief Business Officer John Trizzino told this masthead this morning that the company expects to pass data on to the regulator as it becomes available.
“The regulatory pathway is all dependent on phase 3,” he said.
Trizzino confirmed that it is still aiming to deliver initial doses to Australia in the middle of this year if the product is successful. Shares in the company closed up 3.5 per cent to $US128.18.