The ASX has shaken off most of its losses from its dismal December, closing at its highest level in over a month.
The benchmark S&P/ASX200 index was up 63.8 points, or 1.14 per cent, to close at 5683.2 at 1615 AEDT on Monday, with confidence high on the back of strong US jobs data.
The broader All Ordinaries was up 67.5 points, or 1.19 per cent, 5744.5.
"It's been a pretty strong start for the first full trading week of 2019," said CommSec market analyst James Tao.
The close was the local bourse's best since December 4, when the ASX200 finished at 5713.14.
The index then declined 5.3 per cent over the next 20 days, hitting an intraday low of 5410.2 on Christmas Eve, but has since rebounded.
Most sectors were in the green, particularly the information technology the resources sectors.
Tao cited as reasons for the rally the robust US jobs data; dovish comments by US Federal Reserve chairman Jerome Powell; and talks between US and China in Beijing this week that aim to resolve their destructive trade dispute.
"That all culminates in some pretty favourable trading," Tao said.
The Aussie was also trading at its highest level in two and a half weeks, he noted.
IT shares were the strongest on the ASX, up 2.76 per cent, with dual-listed New Zealand company Pushpay Holdings 5.19 per cent higher, to $3.04, after it said it was now breaking even on a monthly cash flow basis.
The company makes digital tools to make it easier to donate to churches and nonprofits, with a focus on the US market.
Elsewhere in the sector, Afterpay was up 7.12 per cent, to $12.94; Wisetech Global rose 5.59 per cent, to $17.39, and Nextdc Limited rose 5.6 per cent, to $6.22
The mining sector also strong, with BHP up 3.03 per cent, to $34.39, while Rio Tinto rose 2.69 per cent to $78.90.
Gold miners had a tougher time of it, however, after the price of the precious metal fell 0.7 per cent.
Northern Star fell 3.3 per cent, to $9.39, while OceanaGold dropped 2.34 per cent, to $5.
The big banks were up between 0.76 per cent and and 1.4 per cent, led by ANZ, which closed up 34 cents, to $24.59.
Shares in Healius fell 6.18 per cent, or 17 cents, to close at $2.58 after the pathology and medical centre company recommended shareholders reject a $2.02 billion conditional takeover bid.
China's Jangho group made the indicative cash offer of $3.25 per share on Thursday, which caused a price spike of 12 per cent.
Healius said the proposal "is opportunistic and fundamentally undervalues Healius", the country's second-biggest employer of physicians.
Jangho said it was disappointed the Healius board "has so promptly dismissed an offer that represented compelling value for Healius shareholders" and said it had hired Minter Ellison as legal advisors.
Meanwhile, the Aussie was buying 71.35 US cents, up from 70.23 US cents on Friday and its highest price since December 21.
ON THE ASX:
* The benchmark S&P/ASX200 index was up 63.8 points, or 1.14 per cent to 5683.2
* The All Ordinaries was up 67.5 points, or 1.19 per cent, to 5744.5.
* At 1415 AEDT, the SPI200 futures index was flat at 5631.
CURRENCY SNAPSHOT AT 1415 AEDT:
One Australian dollar buys:
* 71.35 US cents, from 70.23 on Friday
* 77.26 Japanese yen, from 76.10
* 62.46 euro cents, from 61.63
* 55.98 British pence, from 55.57
* 1.06 NZ cents, from 1.05
GOLD:
The spot price of gold in Sydney at 1415 AEDT was $US1,289.24 per fine ounce, from $US1284.40 on Friday.
Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O) fueled a second straight session of gains on Wall Street on Monday, with the resumption of U.S.-China trade talks helping ease concerns that have pummeled the market in recent months.
The benchmark S&P 500's .SPX advance added to a 3.4 percent surge on Friday, when strong U.S. jobs data eased worries over economic health and the Federal Reserve calmed nerves over interest rate hikes crimping growth.
Fears of a global slowdown have led to a sharp pullback in the markets over the last few months and in analysts’ estimates for corporate growth. But after hitting a 20-month low on Christmas Eve, the S&P has gained over 9 percent.
China has the “good faith” to work with the United States to resolve trade frictions, China’s foreign ministry said, while U.S. Commerce Secretary Wilbur Ross said he saw “a very good chance that we will get a reasonable settlement” as the two countries started their first face-to-face talks since a 90-day truce was agreed in December.
“The main thing is the administration’s implied progress on talks with China. That’s something that market sees as very important,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
Ten of the 11 major S&P sectors rose. The biggest gain was logged by the consumer discretionary index .SPLRCD, which jumped 2.64 percent, led by a 3.2 percent rise in Amazon. That made Amazon Wall Street’s most valuable company at $794 billion, eclipsing Microsoft’s market capitalization, which reached $789 billion following a 0.85 percent rise in its stock.
They and other high-profile technology and consumer stocks have rebounded after falling sharply in the final quarter of 2018.
Much of Monday’s upbeat sentiment was an extension of the previous session’s rally.
“The news on Friday was positive, and market participants are now acting more confident, and that is feeding on itself,” said Tom Martin, a portfolio manager at Globalt Investments in Atlanta.
The S&P energy index .SPNY gained 1.5 percent as oil prices climbed about 3 percent on support from OPEC production cuts. [O/R]
The Philadelphia Semiconductor index .SOX, which includes many companies dependent on China for revenue, jumped 2.36 percent.
At 2:13 pm ET, the Dow Jones Industrial Average .DJI was up 0.65 percent at 23,584.85 points, while the S&P 500 .SPX had gained 0.90 percent to 2,554.7.
The Nasdaq Composite .IXIC added 1.28 percent to 6,825.16.
Utilities .SPLRCU was the only sector down, dragged lower by PG&E Corp’s (PCG.N) 22 percent slump. Reuters reported that the California utility is exploring filing for bankruptcy protection related to potential liabilities from wildfires.
With earnings season approaching, investors expect a slowdown in fourth-quarter profit growth and they will scrutinize forecasts for signs of further weakness.
Analysts now estimate S&P 500 companies to increase their fourth-quarter earnings per share by 15 percent. That compares to expectations of 20 percent growth three months ago, according to Refinitiv IBES data. The estimate for 2019 profit growth has fallen to about 7 percent from 10 percent.
Dollar Tree Inc (DLTR.O) jumped 5 percent after activist investor Starboard Value LP called on the retailer to sell its underperforming Family Dollar business and proposed replacing a majority of its board.
Loxo Oncology Inc (LOXO.O) surged 66 percent after Eli Lilly and Co (LLY.N) said it would buy the cancer drug developer for about $8 billion.
Advancing issues outnumbered declining ones on the NYSE by a 4.27-to-1 ratio; on Nasdaq, a 3.17-to-1 ratio favored advancers.
The S&P 500 posted no new 52-week highs and no new lows; the Nasdaq Composite recorded 27 new highs and 12 new lows.
Source: Netwealth Morning Business Roundup
Making the most of the seasonal produce with a Stone Fruit and Granola Bowl along with your Coffee this morning.
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