Get InQueensland in your inbox Subscribe

Market makes another jump on back of big gains in US


The Australian share market has crept almost half a percentage point higher in early trade after US indices climbed on a record jump in retail sales and the prospect of more economic stimulus.

Print article

The S&P/ASX200 benchmark index was higher by 24.6 points, or 0.41 per cent, at 5966.9 points after the first 30 minutes of trade on Wednesday.

The All Ordinaries index was 24.4 points, or 0.40 per cent higher, at 6082.5.

Health was the best-performing sector, up 1.71 per cent.

That follows news that a UK-led drug trial of a generic steroid drug called dexamethasone used to treat COVID-19 patients reduced death rates among the most severe cases.

Information technology was the next best sector, up 1.48 per cent.

Financials, materials and consumer discretionaries were marginally lower.

Wind farm operator Infigen Energy had a 7.32 per cent jump in shares to 88 cents after a takeover bid from Spanish utility Iberdrola, valuing it at $835 million.

Iberdrola has offered Infigen shareholders a price of 86 cents per share, a 7.5 per cent improvement on a rival bid by UAC.

Shares in Carsales edged higher by 3.19 per cent to $17.49 after it reported improving customer activity following the easing of coronavirus restrictions.

This activity, from late April to early June, was better than the same period last year.

In mining, BHP has hired CSL finance chief David Lamont, who will return to the big miner after almost 15 years.

BHP was up 0.03 per cent to $3.29.

Rival Rio was 0.04 per cent better to $99.60, while Fortescue was dropped 0.54 per cent to $14.80.

CSL shareholders were not fazed by the loss of Lamont. The biotech shares rose 1.7 per cent to $288.84.

In banking, ANZ was the only one of the big four to be trading lower, down 0.10 per cent to $19.21.

The Commonwealth Bank was higher by 0.52 per cent to $69.45, NAB was up 0.05 per cent to $18.86 and Westpac gained 0.39 per cent to $18.16.

The ASX climb follows a good day on Wall Street, where all three major US indices posted their third consecutive daily gains.

Commerce Department data showed US retail sales jumped by a record 17.7 per cent in May, blowing past the 8.0 per cent increase analysts expected.

Investor risk appetite was given a further boost by the Trump administration’s anticipated $US1 trillion ($A1.4 trillion) infrastructure package aimed at jump-starting the economy.

However, an outbreak in Beijing this week of 100 cases of the virus and a rise in infections in much of the US have made investors worry the effects of the pandemic are far from over.

The Australian dollar was buying 68.66 US cents at 1030 AEST, lower from 69.41 US cents at the close of trade on Tuesday.

It adds to some good news on the Australian economic front including a report from the Commonwealth Bank which said the staged reopening of the economy and the implementation of fiscal support policies were noticeably influencing household spending.

Commonwealth Bank chief economist Stephen Halmarick said the bank was seeing some big changes taking place in household spending that provided early signs of stabilisation and recovery in some parts of the Australian economy, largely driven by changes in government policy.

“Data up to the end of May 2020 showed retail spending intentions jumped higher on the month, consistent with our CBA credit and debit card spending data. Improvement was also seen in entertainment spending intentions.

“After big falls in April, spending intentions stabilised for home buying and travel. Health and fitness spending intentions also stabilised after recent gains, while some weakness was evident for education spending intentions and motor vehicle spending intentions.”

It follows the release of a $500 million stimulus package from the Queensland Government yesterday.

More Business stories

Loading next article