ASX rises 1.4% after Wall Street rebounds; will market sustain rally?

Summary

  • The ASX 200 gained 99.80 points or 1.38% to 7,335.10 by Tuesday afternoon.
  • Telecom sector was the best performer, while healthcare was the only loser on the ASX.
  • Commonwealth Bank shares rose 2.7% to AU$100.08, recovering from the previous session.

The Australian share market rebounded strongly on Tuesday, recouping most of Monday's losses, led by a rally in telecom, realty, energy and financial stocks. The domestic market followed a strong global cues, after Wall Street closed higher in overnight trade. Investors seem to have accepted that interest rates will gradually rise with a recovery in the global economy.

The ASX 200 was trading higher by 99.80 points or 1.38% at 7,335.10 during the mid-market session. Earlier today, the index belled the day in green at 7,235.30 and surged to hit an intraday high of 7,343, rallying as much as 1.5%.

Today’s strong show followed a bloodbath in the previous session when stocks suffered broad losses amid looming concerns about sooner-than-expected rise in US interest rates. The ASX recorded the worst fall in a month on Monday and closed 1.81% lower at 7,235.30.

                         

The Mid Market Pulse || ASX Rises 1.3% After Wall Street Rebounds; Will Market Sustain Rally?

 

On the sectoral front, 10 out of 11 sectoral indices were flashing in green, while telecom and realty stocks gained the most. The telecommunications services sector was the best performer with 2.1% gain, followed by A-REIT, which gained 1.82%. Materials, energy and financial were also among top gainers, rising over 1.5%, each. Utilities, consumer discretionary and industrials sectors also surged over 1%.

Bucking the trend, healthcare was the lone loser, trading lower with 0.4% loss.

In the banking space, all big four lenders - Westpac Banking Corporation (ASX:WBC), Commonwealth Bank of Australia (ASX:CBA), Australia and New Zealand Banking Group Limited (ASX:ANZ) and National Australia Bank Limited (ASX:NAB) – were trading higher.

Commonwealth Bank of Australia rebounded 2.7% with share price crossing over AU$100. The lender’s shares dropped over 5% in the previous session after it announced sale of its Australian general insurance unit, CommInsure General Insurance, to South African insurer, Hollard Group.

ASX-listed energy stocks were also in upbeat mood, with index heavyweights Woodside Petroleum Limited (ASX:WPL) and Santos Limited (ASX:STO) trading in green, owing to higher crude oil prices. Crude oil prices soared on Monday due to a pause in the much-awaited decision on the revival of the US-Iran Nuclear deal. August delivery Brent crude oil futures trade 0.32% up at US$75.10 per barrel and WTI crude oil futures for the August delivery quoted at US$73.20 per barrel, up 0.11% as of 22 June 2021.

Top Gainers and Losers

Australian metal and mining firm IGO Limited (ASX: IGO) was the top percentage gainer on the ASX, rising 5.8% to AU$7.49. Some other top performers were Pilbara Minerals Limited (ASX:PLS), Chalice Mining Ltd (ASX:CHN), Reece Limited (ASX:REH), and Worley Limited (ASX:WOR).

On the other hand, BNPL player ZIP Co Limited (ASX:Z1P) was the top loser on the ASX, falling 2.7% to AU$7.99. WestGold Resources Ltd (ASX:WGX), Appen Limited (ASX:APX), JB HI-FI Limited (ASX:JBH) and Treasury Wine Estates Limited (ASX:TWE) were among other top laggards.

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Battery anode company Talga Group Ltd (ASX:TLG) announced it had inked a deal with Nordic Battery maker FREYR to supply Talga’s Swedish active anode materials (Talnode). The material will be used for FREYR’s battery cell production, which is under development in Norway. Following the announcement, shares of Talga rose 2.13% to AU$1.440.

Tesserent Limited (ASX:TNT) gained as much as 12.2% to 23 Australian cents on an upbeat forecast. The cyber-security services provider said it would comfortably exceed its prior ambition of annualised turnover run rate of AU$150 million, based on turnover for the month of June annualised. The company also stated it is expected that the annualised turnover based on June would be about AU$180 million.

Shares of Openpay Group Ltd (ASX:OPY) rose as much as 12.411% to AU$1.58 after the company stated it would acquire Payment Assist Ltd, a BNPL provider to the UK automative sector, for 11.5 million pounds. The transaction includes an earn-out component of up to 17 million pounds, with completion expected in the first half of FY22.

Milton Corporation (ASX:MLT) shares jumped 16% to AU$5.81 after the company announced that the firm would merge with Washington H. Soul Pattinson and Company Limited (ASX:SOL) via a Scheme of Arrangement. The merger will help in the creation of a leading and more diversified Australian investment house.

Antilles Gold Limited (ASX:AAU) has announced high-grade gold intercepts at La Demajagua gold/silver deposit in Cuba. The intercepts have 17 cored holes, 14 out of which have been analysed to date. Silver is also evident in numerous intercepts. Boosted by the development, Antilles Gold shares gained 24% to 8.1 Australian cents.

Prominence Energy Ltd (ASX:PRM) updated today that it had signed a binding term sheet with the Patriot owner to acquire 20% of Patriot Hydrogen Pty Ltd. The agreement is still subject to completion of the company’s due diligence and shareholder approval.

Navarre Minerals Limited (ASX: NML) announced that its Share Purchase Plan (SPP), now closed, was oversubscribed on Friday 18 June 2021. The Company received total applications of about AU$4.9 million, over the targeted amount of AU$2 million.

Shares of Commonwealth Bank of Australia (ASX:CBA) rose 2.7% to AU$100.08, paring some of previous session losses. The stock had fallen over 5% on Monday after the lender announced sale of its general insurance business. CBA, one of the four premier banks of the country, has signed a deal to sell its Australian general insurance unit, CommInsure General Insurance, to South African insurer, Hollard Group. The deal includes an exclusive 15-year strategic alliance with Hollard for the distribution of home and motor vehicle insurance products to CBA’s retail customers in Australia.

Little Green Pharma Ltd (ASX:LTD) has informed exchange that it had acquired world-class, fully operational GACP cultivation and GMP-licenced medicinal cannabis asset in Denmark. This plant has a capacity to produce in excess of 20 tonnes of biomass per annum, including 12 tonnes per annum of dried cannabis flower.

SILK Laser Australia (ASX:SLA) has shared that the Company had successfully completed a fully underwritten placement to raise AU$20 million, which will result in the issuance of approximately 4.7 million new shares.

Japan’s Nikkei Leads Rally in Asian Shares

Asian markets were trading higher in the opening trade, tracking overnight gains from Wall Street. Japan's Nikkei was the top performer in the region, surging as much as 2.5%.

Seoul's KOSPI rose 0.55% and Taiwan’s Weighted Index climbed 0.85%.

China’s Shanghai Composite rose 0.3%, while the Straits Times index in Singapore traded flat with positive bias.

Meanwhile, Hong Kong’s Hang Seng dropped 0.2% in the opening trade.

On Monday, Wall Street closed higher as investor shrugged off inflation worries. The Dow Jones rose 1.76% and the S&P 500 gained 1.4%. The NASDAQ Composite climbed 0.79%.


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