The Australian sharemarket is off to its best start in a fortnight, with the ASX 200 lifting by 2.04 per cent to 6,047.2, following solid gains from US and European markets and better manufacturing data. Keep in mind that shares briefly hit fiveweek lows on Monday and slumped by 2 per cent on Friday. Markets have been choppy partly due to further lockdowns in Victoria, the continued spread of COVID-19 and ahead of this month’s profit reporting season.
Victoria has recorded another 439 coronavirus cases, following the announcement of 429 yesterday. NSW has recorded 12 new cases. All sectors are improving, with technology stocks standing out. The US tech heavy Nasdaq rose by 1.5 per cent and hit a record high last night. The defensive gold sub-sector is the only group of stocks in the red.
A number of countries have announced changes to their operations due to Stage 3 and 4 restrictions in Victoria.
Wesfamers (WES) will shut 168 of its Bunnings, Kmart, Target and Officeworks stores to in-store retail customers in metro Melbourne for six weeks start midnight tomorrow. It expects online operations to continue as normal. Over the past year, the metro Melbourne stores have made up ~17 per cent of the group’s retail sales. Inghams (ING) expects to reduce its workforce by 33 per cent at two of its meat processing plants in Victoria (Somerville and Thomastown) due to stage 4 restrictions.
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JB Hi-Fi (JBH) plans to temporarily shut 46 JB HI-FI and 31 The Good Guys stores located within metro Melbourne from 11:59pm Wednesday for a minimum period of six weeks. It expects online and commercial operations will continue to trade, with fulfilment by home delivery and contactless click and collect.
Adbri (ABC) issued a brief statement confirming it will comply with government restrictions in Victoria and will work closely ‘…with its customers to assess their requirements for construction materials, and will modify production levels in response to demand’.
The Reserve Bank of Australia (RBA) is widely expected to keep the cash rate on hold at 0.25 per cent at 2:30pm AEST. Retail trade rose by 2.7 per cent in June, while Australia recorded an $8.2bn trade surplus in June (survey $8.8bn).
2.6bn shares have changed hands so far today worth a modest $2.8bn. 766 stocks are up, 335 are down and 361 are unchanged.
Published by CommSec