Aussie shares are lifting strongly for a second day, with the ASX 200 index up 159pts or 3.4 per cent thanks to a very positive lead from Wall Street and signs Congress is closer to passing a massive stimulus bill. Local shares have already faded from this morning’s highs however, with the ASX 200 initially surging by 6 per cent on the open.
US markets rose by 11.4 per cent last night. While this was the best daily percentage gain since 1933, Congress is yet to actually sign the stimulus bill and markets remain vulnerable to potential further declines. Economic data in coming weeks is likely to be very soft and will highlight the impact of strict measures to help contain COVID-19. Last night, data highlighted that business activity has crumbled in the Eurozone, UK and the US in March.
In Australia, company news updating the market on COVID-19’s impact on businesses continues today. Virgin Australia (VAH) has decided to reduce domestic capacity from 50 per cent to 90 per cent of flights. VAH will also suspend all Tigerair Australia domestic services and is temporarily standing down 80 per cent of its workforce. The Star Entertainment Group (SGR) is in the process of temporarily standing down over 90 per cent of its 9,000 strong workforce due to the forced closure of casinos as COVID-19 continues its spread.
Wesfarmers (WES) is closing New Zealand’s 25 Kmart stores due to the New Zealand Government’s measures to restrict the operation of ‘nonessential’ services. Bunnings’ 53 locations in New Zealand will remain open. Bunnings, Kmart, Target and Officeworks stores in Australia will remain open for now.
Cochlear (COH) expects COVID-19 to cause significant business disruption for COH as elective surgeries are delayed globally. COH is also facing costs associated with a patent infringement court case in the US. COH is aiming to raise around $850 million from investors to strengthen its balance sheet.
Nufarm’s (NUF) first half loss has widened to $122m (1H19: $14m). The agricultural chemicals company’s revenue slid by 6 per cent and it has suspended its interim dividend. COVID-19 also creates an uncertain outlook for the group. Sigma Health (SIG) expects strong growth ahead due to ‘abnormally high demand flowing from COVID-19’. The drug distributer generated $46m in underlying EBITDA, largely in-line with guidance.
Domino’s (DMP) will close stores in New Zealand for a four week period starting tomorrow. This follows the New Zealand Government’s decision last night confirming that all food delivery and takeaway will be prohibited from tomorrow.
Invocare (IVC) is down 17 per cent. The funeral and cemetery operator (includes Simplicity Funerals and White Lady) will be impacted by the new government restrictions limiting funerals to no more than 10 people. This was announced by the prime minister last night and takes effect at midnight.
While COVID-19 has understandably dominated the market’s attention recently, this is the busiest week of the year for interim dividend payments. IAG, ASX, SHL, WOR and SBM are all set to pay shareholder dividends today.
1.5bn shares have changed hands so far today, worth $3.6bn. 898 stocks are up, 204 are down and 209 are unchanged.
Published by CommSec