The Aussie market is off to a positive start for the new week. Approaching lunch, the ASX 200 is lifting 61 points or 1.1% to 5452 and is near the highs of the session so far. This follows a strong rally on Wall St to round out last week. US markets jumped as 20.5 million Americans lost their jobs in April and the unemployment rate surged from 4.4% to 14.7%, although that was slightly better than expected.
Gains have been broad based with every sector improving after the first few hours of trade. Leading the way has been the energy, industrials, property and financials. Consumer staples and communications have seen the smallest increases.
Retailers are seeing some of the biggest percentage moves with online travel agent Webjet (WEB) lifting 21%, Myer (MYR) is 9.5% higher and Kathmandu (KMD) is gaining 10%. Both KMD and Myer have started reopening stores around the country. Online retailer Kogna.com (KGN) isn’t faring as well, slipping 2.9%.
The major financial institutions are contributing most to the broader advances. Three of the big four are higher with only National Bank (NAB) lower. Macquarie Group (MQG) is performing even better with a 4.9% lift. The investment bank is relaunching its $400 million Macquarie Bank Capital Notes 2 offer after pulling it from the market during the height of the COVID19 market disruption.
Suncorp (SUN) is also making gains of 5.7% after providing a business update. The banking division announced $133 million in COVID19 provisions while coronavirus has also impacted general insurance in the form of reduced motor vehicle claims and increased landlord loss of rent claims. For FY20 costs are expected to rise above $2.7 billion with SUN also expecting costs of $40-70 million in relation to incorrect payments made to some staff (both overpaid and underpaid).
Cochlear (COH) saw revenue fall ~60% in April as the suspension of elective surgeries impacted its hearing implant division. As suspensions are lifted, the recovery will be slow as delays are expected. The company is still confident long term that demand will remain strong. COH shares are 4.5% higher.
Mesoblast (MSB) is in a trading halt as it looks to announce details to a proposed equity financing.
The Aussie dollar has also gained against the greenback and is buying 65.59 US cents. So far, 2b units have been traded worth $2.4b with 753 stocks higher, 351 weaker and 313 unchanged.
Published by CommSec