Tech stocks starred while goldminers and energy stocks were brilliant support acts as the Australian sharemarket halted its three-session slide on Thursday.
The benchmark ASX 200 added 35.2 points, or 0.6 per cent, to close at 5955.5 - not quite recouping Wednesday's losses but limiting the week's decline to 1.7 per cent.
The Australian sharemarket jumped 0.6 per cent on Thursday. Credit:Peter Braig
Booming commodities prices whetted the appetite for mining and energy stocks while the prospect of extended stimulus measures helped paper over the mounting coronavirus toll both locally and abroad.
Wall Street brushed off an explosion of new COVID-19 cases to set the local index up for gains on the first day of Melbourne’s six-week lockdown.
Tribeca portfolio manager Jun Bei Liu said it was easy to label the local rebound as being against the run of play, given the prospect of further pandemic restrictions in NSW.
But she said investors were also looking at the river of stimulus that will surely continue to flow from government.
“You can say share prices are far outpacing the economy … but so far with the amount of stimulus, these measures are actually working,” Ms Liu said.
“And you can expect the government to continue on with stimulus.. we’re not likely going to see a cliff as previously expected in September.”
There was plenty of risk to shrug off on Thursday, not least of which the potential for tensions to escalate with China over Hong Kong.
Australia offered up to 10,000 Hong Kong students and workers already in the country a safe-haven visa, and will also recruit companies to relocate down under in a move that will likely draw retaliation from Beijing.
Locally, weak lending data also laid bare the impact of COVID-19 on loans for housing.
The high-growth tech sector certainly didn’t care, chasing the NASDAQ to lead gains on Thursday.
Afterpay was the best performer on the local bourse, the buy now, pay later darling adding 11.4 per cent finish at a record high close of $73.50.
The $19 billion firm touched $75.26 after Morgan Stanley upgraded its price target to $101. It certainly didn’t hurt that ASIC published a discussion paper that potentially takes aim at Afterpay’s credit-providing rivals.
Tech sector stablemates NextDC and Appen also brushed new peaks, while payment platform Sezzle rocketed 42 per cent before entering a trading halt ahead of an expected capital raising.
Ms Liu said tech companies had been the major beneficiary of super-low interest rates and a tide of global stimulus.
“We’ve got cheap liquidity around the world, which makes it harder to find things that will generate returns,” Ms Liu said. .
“Companies with a high growth potential will attract people ... but tech has also proven to be resilient because of how people’s living habits have changed during the lockdowns.”
Financials and health stocks were flat on Thursday but the materials sector was strong throughout the session.
Heightened iron ore prices lifted Rio Tinto 3.3 per cent to $98.67, while BHP was up 2 per cent to $36.46, and Fortescue Metals 1.4 per cent to $14.87.
Gold's overnight surge through the $US1800 barrier fuelled a number of new intra-day highs for listed precious metal miners.
Evolution touched $6.42, Saracen rose to $6.31, and Gold Road Resources hit $1.94 on Thursday. Each cooled off in afternoon trade but still closed up by between 1.6 per cent and 4.3 per cent.
Improved oil prices pushed energy stocks 2.4 per cent higher.
The property and consumer staples sectors finished in the red, down 0.5 per cent and 0.8 per cent respectively.