ASX Bounces Back From Early Losses

ASX Bounces Back From Early Losses
A workman is stumped while he erects the Australian Stock Exchange board in Melbourne, Australia, 28 August 2006. (AFP/Getty Images)

The Australian share market has demonstrated its resilience, reversing its early losses of as much as 1.4 percent to finish higher by a similar amount and start the week off on a positive note.

After being down 76.3 points early, the S&P/ASX 200 benchmark index closed Monday up 73.9, or 1.41 percent, at 5,319.8 points, while the All Ordinaries index finished 64.5 points higher, or 1.21 percent, at 5,389.5 points.

"It was a nice little turnaround," said the Australian Stock Report senior advisor Ben Le Brun.

The early losses came after Friday's 5.0 per cent, 276-point selloff, the market's worst day in five weeks.

"'A lot of participants would have thought the writing was on the wall, that we could be heading back to 5,000," Le Brun said.

"But once again, we've seen a little bit of starch in the collar, a willingness to buy at this level."

The gains came even as US futures - which in recent days have played an outsize influence on Australian market performance - were pointing to losses of around 0.8 percent on Wall Street on Monday.

"A terrific performance from our market, and we might be looking at a decoupling from the US, because we're looking at reopening and having successfully navigated the COVID-19," Le Brun said.

The gains also came despite Westpac joining rival ANZ in deferring an interim dividend to shareholders, after Westpac's first-half cash earnings dropped 70 percent to $993 million.

Still shares in Australia's oldest bank gained 2.8 percent to $15.77, while ANZ rose 2.5 percent to $16.15, NAB climbed 2.0 percent to $16.46 and CBA gained 1.8 percent to $59.88.

Elsewhere in the financial sector, IAG said there was "limited scope" to pay a final dividend in September, although it would not make a decision until August.

IAG shares were down 2.1 percent to $5.48 and rival QBE's shares dropped 2.2 percent, although Suncorp rose 1.3 percent to $8.64.

Meanwhile Afterpay shares rocketed up 23.8 percent to $36.10 after Chinese tech giant Tencent Holdings announced it had accrued a five percent stake in the company in purchases since late March.

Buy now pay later competitor Openpay gained 15.2 percent, Zip Co climbed 5.9 percent, Sezzle rose 9.9 percent and Humm owner Flexigroup rose 2.9 percent, although Splitit dropped 5.1 per cent.

Goldminers also shone as the price of the precious metal climbed back up above $US1,700 an ounce, with Newcrest rising 6.6 percent, Evolution gaining 7.0 percent and Northern Star advancing 5.9 percent.

Diversified miners were more subdued, with BHP up 0.1 percent to $29.88, Rio Tinto down 1.6 percent to $81.30 and Fortescue Metals falling 1.7 percent to $10.79.

Logistics company Qube rose 17.7 percent to $2.56 after completing a $264 million institutional entitlement offer to support new growth initiatives.

Energy stocks were the only sector to lose ground, falling 0.1 percent as crude prices dropped nearly two percent, with Woodside down 0.8 percent to $20.96.

Among blue chip stocks, CSL rose 2.9 percent to $307.38, Telstra gained 3.0 percent to $3.08 and Woolworths rose 2.3 percent to $35.25.

Meanwhile one Australian dollar was buying 63.83 UScents, down from 64.60 US cents at Friday's close.

By Derek Rose