Australian shares closed marginally lower on Tuesday, paring opening gains, weighed down by sharp losses in bank and information technology stocks in the final hour of the day’s trade. The market witnesses sharp selling in the last hour of the day’s trade as looming fear of a longer lockdown in New South Wales amid rising coronavirus cases turned investors jittery, reversing all of the day's gains.
The S&P/ASX200 closed marginally lower by just 1.40 points at 7,332.10. Earlier today, the index opened higher and rose as much as 0.6% to hit an intraday high of 7,382.20, led by gains in industrial, material and utilities stocks. The market sentiment was also boosted by strong cues from Wall Street, while lower interest rates in China also sent a bearish signal to the domestic bourses.
Investors kept a close eye on the COVID-19 situation in the country. The number of new daily COVID-19 cases in NSW has dropped for the first time in a week to 89, compared to 112 registered Monday. However, the country’s highly populated state reported second death in two days, while the pandemic outbreak has now spread to other regions, with a case detected in Goulburn, about 200 kilometres from Sydney. Meanwhile, Queensland has recorded three new cases of COVID-19, while Victorian registers one new case in addition to two others announced late Monday. In a partial relief, the government has announced to relax South Australia's border restrictions with south-eastern Queensland, including Brisbane, from Friday midnight.
The market breadth, indicating the overall strength of the market, with eight of the 11 sectoral indices settling in green. The industrial sector was the top performer with 1% gain. Among others, materials, health care, consumer staples and utilities also witnessed surge in buying.
Meanwhile, A-REIT was the worst performer on the ASX with 0.4% loss. Among others, energy, tech and financial were the top laggards.
How sectoral indices performed today?
The information technology settled in red with marginal losses, paring early leads. In the tech space, buy-now-pay-later giant Afterpay (ASX:APT) ended lower, while Appen (ASX: APX), network operator Megaport (ASX:MP1) and fintech firm Zip Co (ASX:Z1P) settled in green.
In the energy space, most of indices closed lower, owing to a fall in crude prices. Index heavyweights Woodside Petroleum (ASX: WPL), Beach Energy (ASX: BPT), Oil Search (ASX:OSH) and Ampol (ASX:ALD) ended in red. Crude oil prices slipped on Monday over concerns of spreading a new variant of coronavirus, squeezing the global economic recovery.
In the mining sector, index heavyweights BHP Group (ASX:BHP), Rio Tinto (ASX:RIO) and Fortescue Metals Group (ASX:FMG) shares ended in green, owing to a rise in iron ore futures. The rally in resource stocks were also supported by The People’s Bank of China decision to cut the reserve requirement ratio (RRR) for all banks by 50 basis points, the amount of cash most banks must hold in reserve, to boost lending.
In the banking sector, three of the Australia’s big four lenders - Commonwealth Bank of Australia (ASX:CBA), Australia and New Zealand Banking Group (ASX:ANZ), Westpac Banking Corporation (ASX:WBC) – ended in red, reversing early gains. National Australia Bank (ASX:NAB) closed higher with marginal gains.
Shares in News
Among individual stocks, Tech firm Nearmap Ltd (ASX:NEA) was the top percentage gainer on the ASX, surged as much as 17.38% to touch an intraday high of AU$2.33 after aerial imagery technology and location data company announced its unaudited preliminary results for the year ended 30 June 2021. Paring some of gains, the stock closed 14.36% higher.
Meanwhile, equity management firm Platinum Asset Management (ASX: PTM) was the top laggard on the ASX, falling 8.26%.
Shares of Youfoodz (ASX: YFZ) spiked as much as 80% to 92 cents after the readymade meal company entered into a scheme implementation deed with Hellofresh SE, to be acquired by way of a scheme of arrangement. Hellofresh has proposed to acquire 100% stake in Youfoodz for 93 cents per share in cash by way of a scheme of arrangement. The bid price represents a premium of 82% to the last closing price of 51 cents per share and a 109% premium to the one-month volume weighted average price (VWAP) of 44 cents.
The share price of iCar Asia (ASX: ICQ) jumped 53.3% to hit an intraday high of 46 Australian cents after the online automobile trading company received a non-binding acquisition proposal from its rival Carsome. As per the proposal, Carsome would acquire all the equity shares of iCar that Carsome and its associates do not already own for 55 cents per share. Last year in October 2020, US auto giant Autohome Inc had offered a 50 cents-per-share takeover bid.
Fintech firm Plenti Group (ASX: PLT) shares rose nearly 19% to AU$1.605 after the company delivered strong earnings in June quarter, supported by record quarterly and monthly loan originations. The company recorded loan originations of AU$216.4 million in Q1 FY21, up 260% from the prior corresponding period (pcp) and 26% above the prior quarter.
Shares of WAM Leaders Limited (ASX: WLE) surged as much as 0.6% to AU$1.57 on strong performance in FY21. The investment company has reported a record operating profit before tax of AU$318.1 million and an operating profit after tax of AU$228.9 for the full financial year FY21.
Shares of lithium-boron supplier ioneer Ltd (ASX:INR) rose as much as 3.8% to 41.5 cents after the company awarded an engineering and equipment supply contract to a Danish firm, FLSmidth. The company also stated that deal is for the development of its wholly owned Rhyolite Ridge Lithium-Boron Project in Nevada, US.
Shares of waste recycling company Pearl Global Limited (ASX:PG1) rose as much as 7% to 4.5 cents on supply deal with Alex Fraser. The Company said it had signed a supply agreement with Alex Fraser Pty Ltd, a producer of sustainable materials for civil construction.
Shares of ASX-300 listed almond producer Select Harvests Limited (ASX:SHV) surged as much as 18% to AU$7.6 on strong 2021 harvest estimate. The Company shared it estimates crop volume for 2021, including from acquisition of Piangil orchard, to be about 28,250 MT, up 21.5% from 2020.
PolyNovo Limited (ASX:PNV) shares gained up to 4% at AU$2.5 on Tuesday. The medical device maker said revenue was growing faster in the United States, where more than 50% of hospitals are re-engaging for business.
Shares of explosives maker Incitec Pivot Limited (ASX:IPL) gained as much as 8.8% to reach AU$2.6. The Company has changed its manufacturing model to a regional management structure from a global one.
Asian Markets Hold Opening Gains
Asian markets were trading higher on Tuesday, tracking positive cues from Wall Street, while investors awaited the release of China's trade data for June.
Hong Kong’s Hang Seng was the best performer in the region, rising 1.8%. Thailand’s SET Composite also climbed over 1%, while Taiwan’s Weighted Stock Index gained 0.4%.
In a similar trend, Japan's Nikkei surged 0.5%, while Singapore’s Straits Times surged 0.7%.
Meanwhile, Seoul’s Kospi gained 0.7%, while China’s Shanghai Composite rose 0.25%, paring opening losses.
India’s BSE Sensex also gained 0.5% in opening trade, tracking firm cues from Asian peers.
In the overnight trade on Monday, US markets ended on a strong note, with the NASDAQ Composite and the S&P 500 hitting all-time highs, as investors are keenly waiting for the start of the second-quarter earnings season in the US to predict the next leg of the equity market. The Dow Jones gained 0.36%, while the S&P 500 rose 0.35%. The NASDAQ Composite added 0.21%.