As it happened: Banks bounce back to help ASX edge higher

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As it happened: Banks bounce back to help ASX edge higher

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Gains for the big four banks and Telstra helped the Australian sharemarket finish slightly ahead on Wednesday as the US political sideshow dominated an otherwise quiet day for corporate news.

The ASX 200 added 7.5 points, or 0.1 per cent, to close at 6686.6, shifting between narrow losses and gains throughout the day before edging ahead late.

Australian shares edged higher on Wednesday. Credit:Louie Douvis

CommSec market analyst Steven Daghlian said a tug-of-war between major companies had essentially kept the market flat.

Commonwealth Bank, NAB, Westpac and ANZ recovered from a weak start to drag the market higher, while energy stocks resumed their rollicking rally on the back of improved oil prices.

BHP and Fortescue Metals also gained ground, but the market’s advance was halted by a number of blue-chip heavyweights.

Supermarkets Coles and Woolworths sagged, Transurban slipped, Wesfarmers lost ground and the tech sector extended its decline to a third session. Big miner Rio Tinto finished 0.6 per cent lower at $120.74.

Mr Daghlian noted investors were most likely focused on the political events in Washington amid a January news vacuum.

In a largely symbolic act, the US House of Representatives voted to demand that Vice-President Mike Pence use the Constitution’s 25th amendment to remove President Donald Trump from office.

The non-binding resolution precedes a vote in the coming days to impeach the president for a second time.

“After a relatively busy first week of the year, the focus in recent days has been more on the political side of things, just seven days out from Biden being sworn in,” Mr Daghlian said.

“People are questioning whether there are going to be protests and the like but I think the markets have mostly overlooked this as a bit of noise and disruption.”

Biotech CSL drooped 0.7 per cent on Wednesday to close at $271.04, despite insisting its timeline for the production of 50 million doses of the AstraZeneca coronavirus vaccine remained unchanged.

Scientists had called for the planned rollout of the product in Australia to be paused because it was not yet known if it was effective enough to ensure herd immunity.

Improved commodities prices boosted the materials sector, especially gold miners, while the $35.5 billion Telstra gained 2.7 per cent to close at $3.09.

Solomon Lew’s Premier Investments was the market’s best performer with a 12.7 per cent rise to $25.35 on the back of a solid trading update.

A number of other discretionary retailers finished ahead, including Harvey Norman, Bapcor, Kogan, Super Retail Group and JB Hi-Fi.

The Australian sharemarket finished slightly higher after a directionless session that flitted between narrow losses and gains.

The ASX 200 added 7.5 points, or 0.1 per cent, to close at 6686.6. The banks improved after a weak start while BHP, Fortescue Metals, Telstra, and energy stocks all gained ground.

Pulling the other way were Rio Tinto, CSL, Macquarie, Wesfarmers, Woolworths, Coles Transurban, ResMed.

The big banks are back in front after a mixed start to the day and are helping the ASX 200 move higher in late trade.

Commonwealth Bank was 0.2 per cent ahead at $86.02 by 3pm, after spending most of the day in the red.

NAB added 0.2 per cent to $23.51, Westpac was 0.7 per cent higher at $20.64, and ANZ rose 0.7 per cent to $24.22.

Macquarie Group remained subdued and was last 1.3 per cent lower at $136.97.

The wider market had edged 0.2 per cent higher to 6687.5 with about an hour to go. Telstra was up 2 per cent at $3.07.

BHP and Fortescue Metals had pulled back from earlier highs but remained in front, while Rio Tino fell 0.4 per cent to $120.91.

S&P and Dow E-mini futures were each up 0.2 per cent, while the Nasdaq E-mini was 0.3 per cent higher, pointing to gains on Wall Street tonight.

Australian job vacancies rose by 23.4 per cent in November to exceed pre-pandemic level by almost 12 per cent.

The vacancy rate – job vacancies as a share of the labour force – hit a record high of 1.8 per cent.

Job vacacies rose to a new record high in November, but the outlook for jobseekers is still mixed. Credit:Louie Douvis

ANZ economists noted there are still 3.7 unemployed people per vacancy, though, still above the 3.1 pre-pandemic number, confirming that there is some way to go in the employment recovery.

“Encouragingly, industries hardest hit by the pandemic and restrictions are now seeing extraordinarily high numbers of vacancies compared with pre-pandemic levels, signalling that activity and employment in those sectors are recovering quickly,” ANZ wrote in a note.

Total vacancies rose to 254,400 in November, up from 206,100 in August.

Victoria was the only state to record vacancies below their pre-pandemic level, but as this survey was conducted in mid-November, the state was still in the process of reopening.

Callam Pickering, APAC economist at global job site Indeed said rising job vacancies usually precedes stronger employment growth and that suggests that the Australian labour market will continue to strengthen in early 2021.

“Momentum though is likely to slow as fiscal support measures, most notably JobKeeper and JobSeeker, are removed,” Mr Pickering said.

“While the improvement in job vacancies is welcome, we shouldn’t lose sight of the big picture: the odds are stacked against the unemployed.

“The number of unemployed people per job vacancy is still 20 per cent higher than pre-crisis levels and that makes the decision to completely wind back unemployment support shortsighted.”

“Australia’s unemployed face a very simple but devastating reality. There are not enough jobs. No matter how many jobs they apply for or how diligent they are, most will simply miss out.”

The mining giants – as well as energy stocks – helped the ASX 200 to a narrow lead on Wednesday afternoon following after an overnight improvement for iron ore, gold, and oil prices.

The heavyweight materials sector had a soft start to the week as the iron ore titans pulled back from last week’s record highs, and gold miners sagged with the price of the precious metal.

The energy sector is leading gains for the ASX 200 on Wednesday. Credit:

However, BHP looked set to snap a three-session slide on Wednesday with a 0.6 per cent gain to $46.29 by 1.40pm AEDT.

Fortescue Metals added 0.5 per cent to $25.26 and Rio Tinto was up 0.5 per cent to $122.09. The latter has pledged to move swiftly to strengthen its relationship with the Mongolian government in an attempt to defuse a deepening dispute over the $8.7 billion Oyu Tolgoi copper-gold mine expansion.

Newcrest was up 1.8 per cent at $26.61 after announcing it would spend $146 million into the construction of its Havieron Project in Western Australia, which it owns in a joint venture with UK firm Greatland Gold.

Fellow gold miner Norther Star gained 1.6 per cent to $13, Evolution was up 2 per cent to $4.77, and Saracen jumped 2 per cent to $4.90.

The energy sector was up by a collective 3.9 per cent after oil prices jumped again overnight. The sector pulled back on Tuesday but has performed strongly since the announcement of surprise production cuts by Saudi Arabia last week.

Woodside Petroleum added 5.1 per cent to hit a fresh 10-month high of $26.62, Whitehaven Coal was up 5 per cent to $1.68, Oil Search leapt 7.3 per cent to $4.49, and Santos added 3.5 per cent to $7.48.

Australia’s major supermarkets are dragging the local sharemarket down on Wednesday, but a swathe of discretionary retail names are surging.

Shares in the $50 billion Woolworths had fallen 2 per cent to $39.09 by 1pm, while grocery rival Coles dropped 2.4 per cent to $17.97.

Shares in Woolworths are down 2% on Wednesday. Credit:Fairfax Media

IGA and Mitre 10 supplier Metcash also fell 0.7 per cent to $3.41, while a2 Milk was down 1.4 per cent at $10.44 to further weigh consumer staples down.

That’s not to say all retailers were suffering, with consumer discretionaries ahead and one of just three sectors in the black.

Just Jeans and Peter Alexander owner Premier Investments was leading the ASX 200 with an 11.9 per cent rise to $25.16. The Solomon Lew-backed company earlier hit a new record high share price $26.70 following a strong trading update this morning.

Elsewhere, $6.2 billion electronics and homeware firm Harvey Norman rose 3.4 per cent to a fresh 13-year peak of $5.16.

JB Hi-Fi was up 3.4 per cent $52.43, Kogan. rose 4.8 per cent to $20.58, Super Retail Group added 3.1 per cent to $11.92, and Temple and Webster climbed 4.7 per cent to $12.43.

Online design and apparel firm Redbubble was 7.3 per cent ahead at $7.04 and earlier set a new record high of $7.10.

The ASX 200 was down 0.2 per cent at 6684.0 by 12.30pm AEDT following a soft start to the day.

The index was jittery in early trade, switching between gains and losses, before sliding on a decline for CSL, Woolworths, Macquarie Group, Transurban, tech and property stocks.

The major banks are mixed, while the iron ore giants are out in front. Here are the biggest movers so far.

Opinion

Within the past fortnight, China has taken two steps that undermine the ability of the incoming Biden administration to build a western alliance to contain China’s growing and increasingly aggressive global assertiveness.

President Xi Jinping’s government has moved to undermine Joe Biden’s chances of building a western alliance.Credit:Getty Images

On the final day of 2020, China signed an investment pact with the European Union despite pleas from Biden advisers to hold off until the new administration had an opportunity to talk through the common concerns of the US and Europe about China’s economic policies and practices.

Then, at the weekend, China announced a response to the myriad of sanctions the Trump administration has imposed on its companies and individuals, unveiling a new set of rules that purport to counter foreign laws that “unjustly prohibit or restrict” Chinese companies or individuals from undertaking their normal business.

Chinese companies or individuals suffering losses because of foreign sanctions, or a third party’s compliance with those sanctions, will be able to sue for damages in China’s courts.

Read Bartho’s full piece here 

From business pivots and cutting back on expenses, to a growing sense of ‘Zoom fatigue’, business industry leaders say workplaces will continue to evolve in 2021.

But Business Australia has also warned owners and management who expect staff to snap back to ‘normal’ ways, or how things were pre-COVID, may be met with resistance.

Business Australia Chief Customer Experience Officer Richard Spencer said COVID-19 had transformed the workplace as we know it. Credit:iStock

The organisation’s chief customer experience officer Richard Spencer said COVID-19 had already transformed the workplace as we know it, and the pandemic would continue to drive change this year.

“A lot of businesses are re-evaluating how they operate and are experimenting with new work environments,” said Mr Spencer.

“They were forced to re-shape their strategy, creating new products, services or delivery methods in a short amount of time.

“There has also been a blurring of work and home life. We may even see a re-examination of the working week.

Mr Spencer said as workers spend more time on video calls than ever, he has also started to see a rise in ‘Zoom fatigue’.

He also warned that owners or management may be met with resistance if they expect staff to snap back to ‘normal’ ways, or how things were pre-COVID.

“Naturally there will be a period of transition. Very few businesses were able to plan their way into the pandemic, but they can all plan their way out,” MR Spencer said.

“Now is the time to see if things can be done better for the interests of both the business and staff.

Mr Spencer said until a virus vaccine is widely available it’s worth businesses having a back-up plan in place should the business experience a crisis.

“This is the optimum time to make plans for how the business will emerge from COVID and re-define itself through 2021,” he said.

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