The Australian share market has shaken off a weak start and climbed out of the red midway through the session, despite fears of a second wave of the coronavirus pandemic hitting travel and consumer stocks.
Key points:
The Australian share market fought back from early falls, as mining and bank stocks rose
Travel and consumer stocks were hit by fears of a second wave of the coronavirus pandemic
Shares in James Hardie rose 6 per cent as it provided more upbeat forecasts for its North American business
By 12:30pm AEST, the ASX 200 had gained 0.3 per cent to 5,959 points, while the All Ordinaries index had risen by 10 points or 0.2 per cent to 6,071.
The major bank stocks rebounded after a mixed performance in early trade, with ANZ (+1.5pc), Commonwealth Bank (+1.5pc), NAB (+0.5pc) and Westpac (+0.7pc) all rising.
Mining stocks led the market higher, lifted by gains for the gold miners, including Saracen Mineral (+5.3pc), Silver Lake Resources (+5.6pc) and St Barbara (+5.6pc).
Shares in cement maker James Hardie rose 6 per cent after it lifted its forecasts for profit margins in its North American business.
“In North America, housing market activity has steadily improved during the past seven weeks despite the COVID-19 pandemic,” the company’s chief executive Jack Truong said.
Shipbuilder Austal was the best-performing stock on the benchmark index, with its shares rising 9.8 per cent after it secured $US50 million in funding from the US Government, which will be used to increase construction capacity.
Travel and retail stocks were hard hit, including Webjet, Flight Centre, Corporate Travel Management, Myer, JB HiFi and Harvey Norman, amid growing concerns about a second wave of the coronavirus pandemic.
Over the weekend, the state of emergency was extended in Victoria and residents of several hotspots in the state were told to stay home.
Shares in software company Altium slumped 8.7 per cent after it downgraded its revenue guidance due to the rising number of coronavirus cases in parts of the US and new lockdowns in Beijing.
Altium has temporarily closed its Beijing office, with staff working remotely.
“China is a key growth driver for [Altium] — we will cautiously watch any ‘second wave’ in Beijing and its impact on lockdowns and [printed circuit board] manufacturing,” RBC Capital Markets analyst Garry Sherriff said.
On Wall Street on Friday, the Dow Jones and the S&P 500 closed lower, while the Nasdaq ended fairly flat, as several US states posted record numbers of new COVID-19 cases.
The Australian dollar was slightly higher at around 68.4 US cents after Reserve Bank governor Philip Lowe said he would prefer a lower dollar but it was hard to argue that the currency was overvalued at the moment.
Tags: Australian share market, travel and consumer stocks
