The Australian share market has hit a fresh record high, as company reporting season continues and overseas markets provide a strong lead.
ASX at 12:00pm (AEDT):
- The ASX 200 has gained 0.5 per cent to 7,182 points
- The consumer and utilities sectors are leading the broad-based rally
- Technology stocks are dragging, led by a fall in WiseTech Global shares
The ASX 200 had risen 0.5 per cent to 7,182 points by 12:00pm (AEDT), boosted by some well received earnings reports.
The best performing stocks were Smartgroup Corporation (+12.4pc), Southern Cross media (+10.9pc) and Iluka Resources (+9.9pc).
The rally gained steam after the jobless rate increased to 5.3 per cent in January, a worse outcome than economists had forecast, making further interest rate cuts likely.
“The labour market started 2020 on a weak note … There is a real risk that the unemployment rate spikes in the coming months,” Callam Pickering, economist at job website Indeed, said.
“We believe it is likely that the Reserve Bank will need to cut rates again by mid-year, with a second cut not out of the question.”
Qantas shares rallied (+5.8pc) as the company increased its interim dividend and announced a share buy-back.
The airline’s half-year profit fell 3.9 per cent to $445 million and the company has flagged a $100-150 million hit to full-year earnings from the coronavirus outbreak.
Qantas will cut capacity to Asia by 15 per cent until at least the end of May as it responds to a fall in demand across the region.
Shares in Super Retail Group have also risen strongly (+4.5pc).
The company announced a 20 per cent drop in first-half profit to $57.4 million but maintained its interim dividend at 21.5 cents per share.
Super Retail — which owns Rebel Sport, BCF and Supercheap Auto — said it owes workers a further $8 million due to underpayments, taking the total estimated back-payments to more than $61 million.
Tech stocks rebound on Wall Street
After a warning on lower sales and supply disruptions from Apple earlier this week hit global tech stocks, the iPhone maker bounced back this session.
Apple shares (+1.4pc) recouped most the previous day’s losses, while shares in chipmaker Nvidia Corporation rose (+6.1pc) after a broker upgrade.
Shares in fitness device company Garmin jumped (+6.7pc) as its revenue forecasts beat analysts’ estimates.
Energy stocks also boosted US markets amid a rise in crude oil prices.
Market snapshot at 7:35am (AEDT):
- ASX SPI futures +0.2pc at 7,106, ASX 200 (Wednesday’s close) +0.4pc at 7,144
- AUD: 66.74 US cents, 51.64 British pence, 61.78 Euro cents, 74.31 Japanese yen, $NZ1.046
- US: Dow Jones +0.5pc at 29,377, S&P 500 +0.6pc at 3,389, Nasdaq +1pc at 9,827
- Europe: FTSE 100 +1pc at 7,457, DAX +0.8pc at 13,789, CAC +0.9pc at 6,111, Euro Stoxx 50 +0.8pc at 3,539
- Commodities: Brent crude +2.5pc at $US59.17/barrel, spot gold +0.5pc at $US1,608.87/ounce
The minutes of the Federal Reserve’s latest meeting were released, reiterating that the US central bank expects to keep interest rates steady this year, despite the new risks posed by the coronavirus outbreak, which it said “warranted close watching”.
“Participants generally saw the distribution of risks to the outlook for economic activity as somewhat more favourable than at the previous meeting,” the minutes of the Fed’s January meeting read.