Local shares are rebounding from recent losses with the ASX 200 near its best levels of the session at midday. The benchmark index is up 55 points or 0.9% to 5976 following improvements on Wall Street even in the face of surging daily COVID-19 cases across the US. The tech heavy NASDAQ index was a star performer supported by the megacaps like Microsoft and Apple.
The local tech sector is taking the lead from its US counterparts and outperforming on the Aussie market. Afterpay (APT) has hit new record highs with a 10% rally on a broker upgrade and a raising of its price target to $101 by Morgan Stanley. Gains have been followed by energy, materials and communications while consumer staples are the lone decliners.
Big miners are some of the major contributors to broader advances with the iron ore price 3.3% firmer at US$106.90. BHP Group (BHP) is up 2.2% while Rio Tinto (RIO) is rallying 3.2%. RIO also announced that it will close its NZ aluminium smelter on the South Island in 14 months due to high energy costs and challenging outlook for aluminium prices making the smelter economically unfeasible moving forward.
While RIO investors have been pleased by the move, the same can not be said for NZ energy providers who will have their contracts cancelled due to the closure. Rio’s smelter is the largest individual consumer of power in the country. NZ based Contact Energy (CEN) is down 13% and Meridian Energy (MEZ) is 7% lower.
Treasury Wine Estate (TWE) is down 2.3% with the wine maker experiencing a slump in sales across its major markets in 2H20 due to the impacts of COVID-19.TWE expects its FY20 earnings (EBITS) to fall roughly 21% compared to the year before. Profits were hit hardest in the North Americas region with declines of 37%. The company is also still proposing a demerger of the Penfolds brand from the remainder of its business by end of calendar year 2021.
The Aussie dollar was closing in on 70 US cents but has now dipped slightly to 69.8 US cents. So far, 3.1b units have traded worth $2.7b with 798 stocks higher, 319 weaker and 312 unchanged.
Publishe by CommSec