Aussie shares are lifting for a fifth day and comes off the back of a five-week winning streak, with the ASX 200 index up 47pts or 0.7 per cent to 6,679.7. The market has faded from this morning’s fresh nine and a half month high, which followed a solid lead from Wall Street and a significant lift in iron ore prices. The Dow Jones improved on Friday following a softer than anticipated monthly update on US employment, which has raised hopes for a stimulus agreement.
The Australian sharemarket has only improved for five consecutive weeks on one other occasion in 2020. While it is still early days, the bourse has kicked off the month in a positive manner. Over the past 50 years, the local market has improved in December ~70 per cent of the time. Better than expected vaccine trials, the reopening of some borders and the easing of US election uncertainty has helped recently.
Today’s driving force is the mining sector, which is being pushed higher by a 5.4 per cent surge in iron ore prices to US$145 per tonne. The iron ore price hit a 12 March 2013 high thanks partly to China’s port stockpiles slipping for a third straight week. This is a sign that there’s a shortage of iron ore and that demand has remained strong in China. BHP, Rio Tinto (RIO) and Fortescue (FMG) are gaining ground.
Metcash (MTS) is up 9.5 per cent after delivering a better half year result. MTS swung back to a profit of $125m for the six months to 31 October. While revenue and profits across all three divisions improved over the half, its Hardware business was the best improver. Hardware – a distributor to Mitre 10 and Home Timber & Hardware – posted a 65.8 per cent lift in underlying EBIT to $64.5m. This accounted for around a third of its earnings.
Santos (STO) rose by 3.2 per cent following a lift in the oil price and the signing of a long-term LNG Supply & Purchase Agreement with Diamond Gas International. Village Roadshow (VRL) has entered a
trading halt pending a shareholder vote on the proposed takeover of the company by BGH. VRL shares surged by 31 per cent last month after the offer price was revised higher.
Crown (CWN) announced some changes at its Melbourne casino from Wednesday thanks to the easing of some COVID restrictions. CWN said the number of people permitted at any one time will be 50 per cent of capacity at its gaming operations. Westpac (WBC) will sell its Pacific business for up to $420m. This is part of its strategy to simplify the organisation and includes the sale of Westpac Fiji and its Stake in Westpac Bank PNG.
Kogan.com (KGN) is up 5 per cent despite being fined $350,000 for an Australian Consumer Law breach, which it is reviewing. This is in relation to a four-day coupon code promotion in June 2018. The Court noted that ‘…Kogan did not deliberately intend to engage in the contravening conduct…’
Collins Foods (CKF) is down 0.8 per cent after trading ex-dividend this morning.
3bn shares have changed hands so far today worth $3bn. 733 stocks are up, 528 down and 355 are flat.
Published by CommSec