ASX firmly in the green after positive US lead as Evergrande concerns ease

The ASX climbed higher for a third straight day after a positive lead from Wall Street, as concerns about Evergrande eased.

The Australian sharemarket surged higher after a positive lead from Wall Street as concerns about a default by debt-laden Chinese property giant Evergrande eased.

The US Federal Reserve also flagged tapering of their bond-buying program.

The benchmark S&P/ASX200 index closed firmly in the green, up 1 per cent at 7370.2, while the All Ordinaries Index jumped 1.15 per cent to 7681.3.

“Investors will need to keep an eye on inflation as economies start ramping back up, with lots of kinks still apparent in global supply chains,” OMG chief executive Ivan Tchourilov said.

“Central banks will be looking to address this through interest rates hikes – the big question is when.

“Commodities remained stable and the price of iron ore jumped, with the situation in China putting upward pressure on demand.

“Evergrande is in the clear for the time being, but approaching interest payments are likely to throw the price of iron ore off again. The market has collectively agreed to cross that bridge when they get to it.”

Rio Tinto was up 0.6 per cent at $98.86, BHP slipped 0.72 per cent to $38.38 and Fortescue lifted 1.04 per cent to $15.53 after announcing it had made four executive appointments, including securing Vale executive Dino Otranto for its chief operating officer iron ore role.

Copper miner Sandfire Resources went into a trading halt priced at $6.22 before announcing it had agreed to buy the Minas De Aguas Teñidas operation in Spain for a whopping $US1.865bn ($A2.57bn), to be mainly funded through a fully underwritten equity raising.

Chief executive Karl Simich said the acquisition transformed Sandfire into a first quartile copper producer of global scale.

“Base metal assets which offer this combination of scale, grade, mine life and exploration upside are extremely rare,” he said.

Coal miners were strong performers, with Yancoal lifting 4.96 per cent to $2.54 and Whitehaven rallying 7.24 per cent to $3.11.

The major banks made a big contribution to the gains, with ANZ improving 1.07 per cent to $27.38, Commonwealth Bank rising 1.16 per cent to $100.80, National Australia Bank adding 0.6 per cent to $27.07, Westpac firming 0.64 per cent to $25.07 and Macquarie surging 2.6 per cent to $177.08.

Tech stocks stood out, with buy-now-pay-later market leader Afterpay gaining 4.2 per cent to $131.54, smaller rival Zip advancing 4.92 per cent to $6.83 and logistics software provider WiseTech appreciating 2.82 per cent to $54.34.

Solomon Lew’s Premier Investments, the retail group behind Portmans, Peter Alexander, Smiggle and other well-known brands, booked a near doubling in full-year net profit – a record result despite lockdown-related store closures, with the pyjamas chain and online sales the standouts.

Smiggle was hit hard by school closures, however, with the group describing the impact of Covid-19 as severe.

Shares in Premier Investments put on 3.06 per cent to $27.63.

Mr Tchourilov said News Corp – publisher of this title – was the big winner, with the company’s share price rocketing 8.43 per cent to $32.56.

“News Corp, via its streaming services, has been able to capture a lot of value during Covid lockdowns and has amassed a huge pile of cash,” he said.

“The announced buyback will take over one billion dollars’ worth of shares out of the market, effectively consolidating each shareholder’s stake in the company, and amplifying their share of future profits that the company earns.”

Dairy giant Fonterra Co-operative Group reported a full-year profit drop and a plan to continue to focus on New Zealand milk, but has started the process of selling its Chilean operations and is reviewing Fonterra Australia.

“We are considering the most appropriate ownership structure for this business, one option is an IPO, with the intention that we retain a significant stake,” chief executive Milkes Hurrell said.

Shares in the group put on 6.03 per cent to $3.87.

Brickworks booked record full-year underlying net profit, saying there was a large backlog of detached house construction work in the pipeline in Australia while sales momentum was gathering in North America, sending its shares 2.4 per cent higher to $25.06.

Energy stocks fared well, with Oil Search rising 3.38 per cent to $3.98 and its takeover suitor Santos adding 2.85 per cent to $6.49.

AGL spiked 5.28 per cent to $5.98 a day after it emerged at its annual general meeting that a majority of proxy shareholders had voted in favour of the company adopting more ambitious carbon cuts that would meet the Paris agreement.

The resolution was not put to the meeting, however, as it was conditional on an earlier resolution being approved.

A bid to join the board by 18-year-old university student Ashjayeen Sharif – who sought to shift AGL from coal to renewables – was a step too far for investors, who voted the resolution down.

“Despite AGL’s blatant attempts to greenwash its image by splitting and rebranding, the fact remains that AGL is a coal burning company and will continue to be Australia’s biggest climate polluter under its current plan,” Greenpeace Australia Pacific chief executive David Ritter said.

Copper explorer Revolver Resources made a strong ASX debut, rocketing 17.5 per cent to 23.5 cents, while gold explorer Iris Metals firmed 5 per cent to 21 cents on its first day on the local bourse.

The Aussie dollar was fetching 72.58 US cents, 53.13 British pence and 61.92 Euro cents in afternoon trade.

Originally published as Australian sharemarket firmly in the green after positive US lead as Evergrande concerns ease

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