Home Finance Staggering winning streak for ASX: Three straight days of closing records

Staggering winning streak for ASX: Three straight days of closing records

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The Australian sharemarket’s winning streak has been nothing short of remarkable, with the local bourse racking up its third straight day of record gains. The Australian sharemarket has staggeringly pulled off a third consecutive day of fresh record highs, despite iron ore miners weighing it down and the east coast’s alarming Covid situation worsening.

The benchmark S&P/ASX200 index finished 0.36 percent higher at 7538.4, while the All Ordinaries Index closed 0.35 percent stronger at 7806.5. CommSec analyst Steven Daghlian said the local bourse had an exceptional week. “Over the past five days, the market has hit fresh record highs on three separate occasions, and also we’re in the very early part of an eleventh straight month of gains – that has not happened in 80 years,” Mr. Daghlian said.

“Of course, we were coming off some sharp declines with the Covid situation back in 2020, but it still is a remarkable bounce for the Australian sharemarket under the circumstances.” Mr. Daghlian said it was not surprising that the mining sector weighed on the ASX after the iron ore price slumped by about 7 percent yesterday and had plunged nearly 13 percent over the week.

“This has been partly driven by demand concerns linked to China because policymakers there are looking to contain growth in steel production as a means to reduce emissions,” Mr. Daghlian said. Rio Tinto slid 1.57 percent to $130.05, BHP fell 1.96 percent to $52.10, and Fortescue backtracked 0.95 percent to $23.05.

ASX

Despite recent media reports suggesting BHP was considering getting out of oil, as it is doing with thermal coal as part of an exit from fossil fuels, the mining giant has formally approved spending $US544m ($A736m) on its 72 per cent-held Shenzi North oil project in the US Gulf of Mexico.

It has also approved spending $US258m ($A349m) to move its 60 per cent-held Trion oil project in Mexico into the front end engineering design phase ahead of a final investment decision expected in calendar 2022. Macquarie Research said the Shenzi North approval was expected mainly to leverage previous discoveries in the Greater Wildling area.

Sleep disorder device company ResMed lifted 0.24 percent to $37.27 after delivering a positive full-year result, with chief executive Mick Farrell saying it had been a time of incredible demand for its products.

Mr. Daghlian said both its revenues and profits beat market expectations. “It was partly helped by a recall of products from a competitor and $20m in sales from Covid-related ventilators,” he said. Realestate.com.au owner REA Group, which is majority-owned by the publisher of this title News Corp, retreated 4.7 percent to $159.42 despite booking an 18 percent surge in full-year net profit.

Mr. Daghlian noted REA also declared a record dividend. “It was mainly driven by a strong residential property market,” he said. “It also warned that Covid and lockdowns pose a bit of a challenge for the group.” OMG chief executive Ivan Tchourilov said Domain followed REA lower, dropping 4.94 percent to $4.62.

“These lockdowns will likely lead to a reduction in property listings, which is a negative for the sector in the short term,” he said. New York-based News Corp reported its full-year results, with chief executive Robert Thomson saying it had been the most profitable year since 2013, up 26 percent, in part due to a record number of digital subscriptions, record profits at HarperCollins, and the most considerable profit at Dow Jones since its acquisition in 2007.

News Corp shares jumped 7.88 per cent to $35.20. Mr. Tchourilov said it was unsurprising his company’s most sold stock for the week was Afterpay, which rose 5.5 percent to $132.15. “They’ve picked up a full 35 percent since Square’s acquisition announcement, and OMG investors preferred to sell now instead of seeing if Square will pay later,” he said.

ANZ gained 0.96 percent to $28.50, Commonwealth Bank was up 0.33 per cent at $103.75, National Australia Bank rose 0.57 per cent to $26.69 and Westpac put on 0.92 per cent to $25.12. In broader economic news, the Reserve Bank of Australia modestly downgraded its near-term outlook for the national economy – predicting annual GDP growth of 4 percent at the end of this calendar year, from 4.75 percent previously.

But the central bank also upgraded its medium-term forecast for unemployment, tipping a rate of 4.25 percent at the end of next year, from 4.5 percent previously. “We broadly share the RBA’s optimism about the economy over the medium term,” CBA Economics said. “But we are more concerned about the economy over the near term and think that it will take a while to regain economic momentum again once lockdowns are over.

“Lockdowns across the country have become more frequent, which has a damaging impact on confidence, hiring, and investment. “As a result, we think that the RBA is significantly underestimating the impact that Covid‑19 will have on the economy until the vaccine has been rolled out sufficiently for lockdowns to be a thing of the past.” The Aussie dollar was fetching 73.93 US cents, 53.09 British pence, and 62.49 Euro cents in afternoon trade.

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