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A trifecta of market-friendly news announcements threw fresh fuel on the ASX’s spectacular November rally, lifting shares to a nine-month high.

Breakthroughs on vaccines, borders and the US election helped drive the S&P/ASX 200 up 82.5 points or 1.26 per cent. The index closed just 37 points below where it started the year.

Today’s advance extended the index’s November gains to 12.1 per cent, its best monthly return since inception in 2000. The older All Ords was on track for its best month since at least 1988.

What moved the market

A ‘good news’ day saw positive developments in several key areas of concern for investors:

  • Vaccines: AstraZeneca and Oxford University announced their experimental vaccine was up to 90 per cent effective against Covid-19.
  • Borders: Queensland announced an end to its blockade of Greater Sydney after 137 days.
  • US election: Formal transition arrangements commenced for a handover from President Donald Trump to President-elect Joe Biden.

If that were not enough for investors to absorb, Reserve Bank Deputy Governor Guy Debelle signalled the central bank’s support for long-term government stimulus measures.

“Be careful of removing the stimulus too early,” Debelle told an Australian Business Economists webinar. “A number of European countries learned this lesson to their cost after the global financial crisis.”

The market opened higher following a positive session on Wall Street and kicked ahead in the last hour as US index futures welcomed the White House transition news. S&P 500 futures were lately up 29 points or 0.8 per cent. The index edged up 0.56 per cent overnight following AstraZeneca’s vaccine news.

Winners’ circle

Local action broadly mirrored the US, where investors bought beaten-up value stocks that will recover with the economy, and sold defensive stocks. The major banks reached their highest points since March. ANZ jumped 3.1 per cent, Westpac 2.6 per cent, NAB 2.6 per cent and CBA 2 per cent.

Travel and tourism stocks were boosted by the prospect of free movement between NSW and Queensland and effective vaccines next year. Webjet climbed 4.7 per cent, Qantas 3.9 per cent and Flight Centre 3 per cent. Helloworld gained 8.2 per cent and Air New Zealand 6.9 per cent.

The iron ore majors shrugged off a modest retreat in the ore price from six-year highs. BHP rallied 3.4 per cent, Fortescue Metals 2.7 per cent and Rio Tinto 2.2 per cent.

Energy stocks were lifted by crude’s strongest finish since March. Beach Energy surged 8.2 per cent, Origin Energy 5.2 per cent, Santos 3.9 per cent and Woodside 3 per cent.

A stellar week for investors in Mesoblast continued with a third day of gains as the biopharmaceutical updated investors at its virtual AGM. The company’s shares rose 4.4 per cent, briefly extending this week’s gains beyond 50 per cent.

Generic medicine manufacturer Mayne Pharma ended flat after warning unfavourable currency movements and soft sales dragged revenue for the first four months of the financial year down 9 per cent.

Doghouse

Gold fell victim to the prevailing risk-on sentiment and gains in the greenback. Gold for December delivery settled $36.40 or 1.8 per cent lower at US$1,837.80 an ounce overnight. The yellow metal fell another 0.9 per cent this afternoon to US$1,821.

An index of local goldminers skidded 7 per cent to a level last seen in May. Silver Lake Resource shed 9.4 per cent, Northern Star 8.9 per cent and Saracen Mineral 9 per cent. Sector giant Newcrest lost 6.1 per cent.

Besides Newcrest, the only other market heavyweights to miss the uplift were toll road operator Transurban, down 0.8 per cent and Macquarie Group, down less than 0.1 per cent.

Other markets

Japan’s Nikkei was the pick of the major Asian markets, rising 2.6 per cent. China’s Shanghai Composite dipped less than 0.1 per cent. Hong Kong’s Hang Seng gained less than 0.1 per cent.

Oil built on its highest level since March. Brent crude advanced 41 cents or 0.9 per cent to $US46.45 a barrel.

The dollar rallied 0.3 per cent to 73.17 US cents.

Hot today and not today

Hot today: The prospect of product shipping to the UK and Germany as soon as next month helped lift shares in medicinal cannabis grower Cann Group (ASX:CAN). CEO Peter Crock told shareholders the company was on the verge of the largest export of Australian-grown medicinal cannabis to date. At today’s AGM, he stood by the company’s forecast of $15 million in revenue this financial year as the operation scales up and overcomes regulatory hurdles. The share price jumped 44.3 per cent to 15.5 cents.

Not today: Investors were quick to take profits after Conico (ASX:CNJ) released the results of its first four weeks in the field at its lead-zinc-silver project in Greenland. The company collected surface samples and gravity-borne data to help identify drilling targets for next year. Shares that had doubled in a month fell 24.4 per cent.  

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