Hopes for a Santa Rally flared afresh after the share market overcame weak leads and a state record for Covid cases to log its biggest gain in almost two weeks.
Ten of eleven sectors rose as the S&P/ASX 200 gained 63 points or 0.86 per cent. The advance was the strongest since a 91.5-point burst on December 8.
Healthcare and energy stocks led, with support from the major banks and bulk metal producers. Lithium miners were a notable drag in the wake of a sharp fall in Wall Street’s leading exchange traded fund overnight.
What moved the market
Two weeks of omicron gloom appeared to subside as consumer confidence data weathered the recent upsurge in cases and Prime Minister Scott Morrison ruled out further lockdowns. US equity futures rebounded as Asian markets shrugged off last night’s declines on Wall Street.
Prime Minister Morrison gave the clearest signal yet there is no appetite within the federal government to renew lockdowns to contain the fast-spreading omicron Covid variant.
“We’re going to need to continue to calibrate how we manage this virus and how we live with this virus in the face of Omicron,” he said. “But we’re not going back to lockdowns. We’re not going back to shutting down peoples’ lives.”
“What that means is we have to move from a culture of mandates to a culture of responsibility. That’s how we live with this virus into the future,” he added.
The Prime Minister’s remarks followed the release of the worst daily Covid numbers of the pandemic. New South Wales logged a national single-day record of 3,057 new cases.
Data this morning showed consumer confidence continued to improve even as case numbers climbed. ANZ’s weekly index rose 0.4 per cent to a third straight gain and a six-week high. The survey was carried out over the weekend.
“The much lower hospitalisation rate [with omicron] compared to the Delta wave probably helped,” ANZ Senior Economist, Adelaide Timbrell, said.
Asian markets ignored overnight weakness in Europe and the US. The Asia Dow firmed 1.19 per cent, China’s Shanghai Composite 0.41 per cent, Hong Kong’s Hang Seng 0.53 per cent and Japan’s Nikkei 1.93 per cent.
US futures built as the session advanced. At the Australian market close, S&P 500 futures were ahead 30 points or 0.65 per cent.
Winners’ circle
Marley Spoon jumped 20.86 per cent on news the meal delivery service will acquire Melbourne rival Chefgood. Marley will pay $21 million, with additional earn-outs of up to $5.6 million if revenue targets are achieved.
CSL continued to heal following a heavily-discounted capital raising to buy Swiss firm Vifor Pharma. The biotech rallied 4.91 per cent.
On the wider healthcare sector, Nanosonics climbed 7.46 per cent, Cochlear 3.85 per cent and Ramsay Health Care 3.11 per cent. Sonic Healthcare advanced 2.36 per cent to an all-time high.
The ill winds pummelling markets blew some good for Covid tester Australian Clinical Labs. The pathology services provider rallied 12.22 per cent to an all-time high after upgrading its first-half outlook.
Chief Executive Officer, Melinda McGrath, said: “We anticipate heightened volumes of COVID-19 testing to continue during the remainder of FY22 due to the impact of new variants and outbreaks, the lifting of travel restrictions and increased demand for both commercial and travel testing.”
Yesterday’s biggest losers mounted rebounds. Magellan Financial Group put on 4.37 per cent. The asset manager’s shares tumbled 32.9 per cent yesterday after it lost an important client.
Cimic added 3.97 per cent. The builder slumped 13.37 per cent yesterday on an analyst downgrade and questions over its treatment of former employees in the Middle East.
An eight-week high in iron ore kept bulk metal miners well bid. Rio Tinto gained 3.23 per cent, Fortescue Metals 1.7 per cent and BHP 1.48 per cent.
In the financial space, CBA gained 0.39 per cent, NAB 0.67 per cent, ANZ 0.26 per cent and Westpac 0.19 per cent.
AMP added 0.54 per cent after announcing plans to delist from the New Zealand Exchange. The delisting reflects reduced shareholder numbers in NZ and will help reduce admin costs. Kiwi shareholders will be able to trade their shares on the ASX.
Doghouse
Afterpay slid 1.06 per cent to a 14-month low. The BNPL giant’s share price is closely linked to that of future owner Block, which dropped 5.24 per cent in the US overnight.
Lithium companies slid after the Global X Lithium and Battery Tech ETF slumped 5.33 per cent on Wall Street. The fund closed at its lowest in more than two months after President Joe Biden’s stimulus plan hit a roadblock. The plan included subsidies for green energy. The ETF had risen 65 per cent between May and November.
Lithium miner Pilbara Minerals declined 9.06 per cent after trimming its production guidance. The company experienced delays and shutdowns at its Pilgangoora plants, but said average prices received this quarter would be at the upper end of guidance.
Liontown Resources shed 4.19 per cent, Vulcan Energy 3.83 per cent and Novonix 3.38 per cent. The day’s other worst performers were BlueScope Steel -2.92 per cent and IGA operator Metcash -2.89 per cent.
At the heavyweight end of the market, property giant Goodman dipped 0.8 per cent and retail conglomerate Wesfarmers 0.02 per cent.
Other markets
Oil rebounded from last night’s 2.7 per cent dive. Brent crude bounced 59 US cents or 0.8 per cent to US$72.11 a barrel.
Gold dropped further from Friday’s three-week high. The yellow metal eased US$2.50 or 0.14 per cent to US$1,792.10 an ounce.
The dollar was broadly steady at 71.11 US cents.