ASX winning streak stretches to five days
Australia’s stock market extended its longest winning streak this year as analysts tipped commodity prices, pushing many stocks higher as war rages in Ukraine.
The market posted gains for a fifth straight day as stocks of coal, oil and metals soared on fears that Russia will struggle to supply raw materials under economic sanctions.
Other companies have joined an international boycott of Russian trade after troops invaded Ukraine last week.
On Thursday, Brent crude was trading as high as $118.22 a barrel, but ANZ senior commodities strategist Daniel Hynes estimated it would hit $125.00 within three months.
He said fears that Russia’s oil supply could be disrupted were turning into reality.
While EU and US sanctions have not targeted oil, Mr Hynes said the shipping industry has.
Black Sea merchant ships had been hit and crude tanker bookings from Russia to the United States had come to a halt.
OPEC countries were unlikely to ramp up production soon, Hynes said, as most had little more capacity.
On the ASX, the energy and material shares were the best. Each category gained 2%.
Individually, coal stocks posted some of the biggest gains as investors wondered about supply from Russia.
Whitehaven Coal and Yancoal each gained 10% to $3.96 and $4.75 respectively.
Consumer staples stocks were the worst and fell 2% after major supermarkets traded ex-dividend.
The benchmark S&P/ASX200 index closed up 34.7 points, or 0.49%, at 7151.4 points.
The index is just under 500 points from its record set last August.
The All Ordinaries Index closed up 40.5 points, or 0.55%, at 7,446.8 points.
U.S. markets had closed higher after Federal Reserve Chairman Jerome Powell signaled that the central bank would likely raise interest rates less than some investors feared.
The central bank boss is inclined to support a 25 basis point rate hike in March, he told the U.S. House of Representatives Financial Services Committee.
Most developed economies are experiencing record inflation as they recover from the pandemic. Inflation in the 19 countries sharing the euro hit a new record high last month, at 5.8% a year.
In Australia, there was a boost for the economy as Western Australia finally ditched its coronavirus hard border and opened up to the rest of the country.
In company news, the competition watchdog said it would not oppose the proposed takeover of Helloworld Travel by Corporate Travel Management.
Corporate Travel Management unveiled a $175 million bid for the business travel and entertainment provider in December.
Corporate travel management rose less than 0.5% to $21.98 while Helloworld rose 2% to $2.21.
Miners have benefited from the demand for their products. Fortescue gained four percent to $19.37. BHP and Rio Tinto each improved by 3%.
In the banking sector, the majors were mixed. NAB fared better and gained less than half a percent to $29.11.
Engineering group CIMIC has revealed it still owes workers in the Middle East $4 million.
Last year, CIMIC sold its Middle East business and the remaining payments are funded by the sale.
The CIMIC was little changed at $22.00.
Infant formula supplier Bubs has struck a stock subscription deal with its biggest customer.
Bubs will donate 29.6 million shares to Hong Kong retailer Willis Trading if its parent company buys $50 million worth of goods this fiscal year and $80 million next fiscal year.
Bubs wants to better capitalize on the valuable network of Chinese resellers.
The company’s shares were little changed at 44 cents.
The Australian dollar was buying 73.10 US cents at 1732 AEDT, higher than 72.68 US cents at Wednesday’s close.
ON THE ASX
* The benchmark S&P/ASX200 index closed up 34.7 points, or 0.49%, at 7151.4 points on Thursday.
* The All Ordinaries Index closed up 40.5 points, or 0.55%, at 7,446.8 points.
* At 1732 AEDT, the SPI200 futures index rose six points, or 0.08%, to 7132 points.
One Australian dollar buys:
* 73.10 US cents, compared to 72.68 cents on Wednesday
* 84.57 Japanese yen, from 83.65 yen
* 65.89 euro cents, from 65.40 cents
* 54.54 UK pence, from 54.60 pence
* 107.78 New Zealand cents, from 107.34 cents.