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Milestones tumbled as the prospect of a coronavirus vaccine and economic recovery lifted the ASX to a new eight-month high.

The S&P/ASX 200 took out the 6300 level at today’s open and rose as high as 6438 before paring its gain to 84 points or 1.3 per cent at 6383. At today’s high, the index had risen more than 530 points or 9 per cent in seven sessions since last Monday’s low.

What’s driving the market

“The markets have scarcely had time to respond to the news that Joe Biden is the next President of the United States than we’re hit with the (potentially bigger) news that Pfizer have successfully completed stage three of their Covid-19 vaccine trials, with an astonishing 90 per cent success rate,” NAB Head of FX Strategy Ray Attrill said. “My fellow market analysts at NAB and BNZ have often remarked that no-one wants to be short equities the day that a successful coronavirus vaccine is announced. Well, we may just have arrived at the day,” he added.

Stocks best placed to benefit from a resumption of pre-pandemic life soared after Pfizer and BioNTech revealed their experimental vaccine had been effective in stage three trials involving more than 40,000 participants. Oil companies, travel and tourism stocks and shopping centre operators joined a global rally following Wall Street’s best night in five months.

The Dow Jones Industrial Average jumped 835 points or 2.95 per cent to a record high. The blue-chip average was earlier up as much as 5.7 per cent. A late sell-off trimmed the S&P 500’s advance to 1.17 per cent.

Oil soared. Gold and other havens tumbled.  

Going up

A brutally divided market drew a clear line between winners and losers this morning. Sectors that have suffered under Covid flew higher. Sectors that had benefitted from the ‘stay at home’ economy were smashed.

Oil’s biggest rally in six months lifted the energy sector 8.5 per cent to its highest level since late August. Oil Search soared 15.9 per cent, Beach Energy 13.8 per cent, Santos 12.2 per cent and Woodside Petroleum 7.5 per cent.

The industrial sector climbed 5.5 per cent to its strongest point since early March as investors bought airports, airlines and toll roads. Sydney Airport rose 14.2 per cent, Atlas Arteria 9.6 per cent, Qantas 9.4 per cent, Auckland Airport 7.1 per cent and Transurban 5.3 per cent.

The financial sector has lagged the broader market recovery since the March lows, recovering less than half its losses before this morning’s 4.4 per cent surge. NAB climbed 7.8 per cent amid speculation about short-covering. ANZ added 5.5 per cent, Westpac 5.1 per cent and CBA 3.2 per cent. Macquarie Group gained 4 per cent.

Shopping centre operator Unibail-Rodamco-Westfield rocketed 34.8 per cent, Vicinity Centres 15.6 per cent and Scentre Group 14.1 per cent. In the travel space, travel agent Helloworld put on 21.5 per cent, Corporate Travel Management 16.8 per cent, Webjet 16.8 per cent and Flight Centre 12.9 per cent. Casino group Star Entertainment added 7.7 per cent and Crown Resorts 4.4 per cent.

Going down

At the other end of the market, the big winners from the stay at home economy endured a morning to forget. Any business that relied on home delivery suffered. Online furniture retailer Temple & Webster plunged 20.5 per cent. Meal delivery service Marley Spoon dived 22 per cent, online art marketplace Redbubble 18.3 per cent, online retailer Kogan 14.6 per cent and Domino’s Pizza 11 per cent.

Supermarkets that had benefitted from stockpiling and dining in were sold off. Coles Group shed 5 per cent and Woolworths 2.6 per cent. Retail conglomerate Wesfarmers, which owns the Bunnings brand, fell 2.2 per cent. Property group Goodman tumbled 6.4 per cent.

James Hardie eased 6.2 per despite reporting record half-year sales and operating profit. The building products manufacturer increased group net sales by 12 per cent to $736.8 million and reaffirmed profit guidance.

Other markets

On Asian markets, China’s Shanghai Composite edged up 0.2 per cent, Hong Kong’s Hang Seng 1.3 per cent and Japan’s Nikkei 1.1 per cent.

US index futures ebbed and flowed after last night’s record highs. S&P 500 index futures were lately up two points or 0.1 per cent.

Oil gave back a fraction of its 7.5 per cent overnight surge. Brent crude eased 54 cents or 1.3 per cent to $US41.86 a barrel.

Gold mounted a tentative rebound from its $97.30 overnight loss. Gold for December delivery bounced $16.40 or 0.9 per cent to $US1,870.80 an ounce.

The dollar was flat at 72.78 US cents after pushing as high as 73.4 cents overnight.

What’s hot today and what’s not

Hot today: Berry and citrus farm trust Vitalharvest (ASX:VTH) soared 22.3 per cent following a takeover offer from a fund managed by Macquarie Group (ASX:MQG). Macquarie Infrastructure and Real Assets offered $1 per share to acquire all of the units in the trust, valuing the assets at around $3oo million. Shares in the trust reached 98 cents after trust manager RE Services asked unitholders to take no action while it considered the proposal.   

Not today: The gold sub-sector tumbled 8.4 per cent following the precious metal’s worst single-day decline in seven years. Gold for December delivery tanked $97.30 or 5 per cent overnight to US$1,854.40 an ounce. Ramelius Resources (ASX:RMS) cratered 13.3 per cent, Northern Star (ASX:NST) 11.8 per cent, Saracen Mineral (ASX:SAR) 11.5 per cent and Newcrest (ASX:NCM) 5.1 per cent.

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