Aussie shares are surging higher as the holiday shortened week kicks off, with the ASX 200 lifting by 2.3 per cent to 6,137.2 at lunch. The local market is playing catch-up following gains of around 5 per cent in the US over just two sessions. US stocks are now back in positive territory this year with the technology heavy Nasdaq hitting a record high.
The gains in the US follow a much better than expected update on employment on Friday. There were 2.5 million jobs added in May according to the non-farm payrolls report (an influential report on American jobs growth). The market was anticipating employment to slide by around eight million. The unemployment rate – while is still very high at 13.3 per cent – was well below market consensus of close to 20 per cent. The report helped push equities higher, as the market recovery continues.
The Australian sharemarket is now on a six-day winning streak (up 4.22 per cent last week), which makes it the longest winning streak since October 2019. This follows six consecutive weeks of gains for our market. The ASX 200 is once again above 6,000pts and is trading around a three month high.
The massive ~20 per cent slump on our market in March was of course triggered by the COVID-19 health crisis, which resulted in shutdowns globally. With the illness coming under some level of control in places (for now), the gradual reopening process is ahead of the market’s worst case expectations. This has helped the Australian market rise by close to 40 per cent from the 23 March low. Note that the market is still down by around 7 per cent Year-to-Date.
Banks are up by close to 6 per cent at lunch, which is helping push the market higher. Gains are impressive across most of the market however, with technology stocks, CSL Limited (CSL) and gold miners the lone losers.
Travel stocks are continuing to stand out on hopes that tourism is closer to resuming (in some capacity). Shares in Sydney Airport (SYD) are up 8 per cent, Qantas (QAN) is up 5.4 per cent and Flight Centre (FLT) is up 12.7 per cent. Retailers are also lifting strongly, with adventure retailer Kathmandu (KMD) up 14 per cent and Adairs (ADH) up 3.6 per cent. Iron ore miners like BHP, RIO and FMG are also gaining following strengthening ore prices. Brazil’s Vale has closed down one of its operations due to 188 positive COVID-19 tests.
3.3bn shares have changed hands so far today, worth an extremely heavy $5.8bn. 835 stocks are up, 431 down and 342 are unchanged.
Published by CommSec