ASX gains 13% for 2021 as Covid cases spike: Friday falls 0.3% lower

The Aussie sharemarket took a breather from its six-day rally as investors were stunned by the hot on the heels record spike in Covid-19 cases to wrap up the last trading day of the year.

The property sector led the broader market lower by 1.6 per cent while financials, the dominant sector on the local bourse fell 1.2 per cent with materials shedding the least, down 0.3 per cent.

NSW’s daily Covid-19 cases has almost doubled for the second time in three days, with 21,151 infections and six deaths recorded in the past 24 hours. Victoria reported a new daily record of 5,919 new cases and seven deaths, while Queensland recorded 2,222 new cases.

Investors mulled on the potential implications to the economic recovery after reviewing modelling which forecasted the daily case of 25,000 in a month’s time not far from coming into fruition this week amid South Africa declaring its Omicron peak subsiding.

The news eclipsed the close from Wall St where the value-driven Dow Jones snapped its six day winning streak, the same pattern mimicked by the ASX today. On Wall Street, stocks closed at session lows after firming up for the majority of the session despite fresh economic data showing strong indicators of the labour market and its manufacturing sector.

The pullback today meant that the local bourse retreated from its 3.5 month high from 13 August to close off the year with a 13 per cent gain, its best year since the 23 per cent jump in 2019 and the fourth-best over the decade.

The major banks saw declines over 1 per cent with National Australia Bank (ASX:NAB) leading the pack by a fall of 1.6 per cent, followed by Commonwealth Bank (ASX:CBA) lost 1.2 per cent, then ANZ (ASX:ANZ) down 1.1 per cent while Westpac (ASX:WBC) closed 0.7 per cent lower at 0.7 per cent.

Iron ore miners closed mixed Rio Tinto (ASX:RIO) adding 0.6 per cent, BHP (ASX:BHP) rose 0.4 per cent while Fortescue Metals (ASX:FMG) bucked the trend closing 0.4 per cent lower.

In other resources, Woodside Petroleum (ASX:WPL) fell 0.9 per cent while Santos (ASX:STO) lost 1.4 per cent lower though Beach Energy (ASX:BPT) rallied 0.8 per cent higher.

The gold players shined as the precious metal added $11.10 overnight with Northern Star (ASX:NST) adding 1.2 per cent, Newcrest Mining (ASX:NCM) rose 1 per cent, while Evolution Mining (ASX:EVN) closed 0.7 per cent higher.

In Asian markets, Hong Kong stocks are leading the gains bolstered by a surge in Chinese tech stocks. Traders received fresh economic data which showed an unexpected acceleration in China’s factory activity growth for December at 50.3 from 50.1 the month before according to the National Bureau of Statistics.

US futures are in the red pointing to Wall St slated to open lower as expectations of the Santa Rally remains hopeful with three more trading days to live up to the period.

Next week, economic news is on the lighter side with IHS Markit slated to release the December manufacturing report with eyes to see how inflation pressures and skilled worker shortages have played a role, while CoreLogic slated to show December home prices rising at a slower pace. ANZ has scheduled its job advertisements for December which is a touch point on our labour market and IHS Markit is set to close off the week with the services report for December.

Despite today’s decline, the local bourse rose 0.3 per cent over the week. For today, the S&P/ASX 200 closed 0.9 per cent or 69 points lower at 7,445.

The market will reopen next Tuesday 4 January 2022. Happy New Year and thank you for your support here at the network!

Company news

Lithium players have taken the spotlight with Magnis Energy Technologies (ASX:MNS) stating a game-changer for the transport sector is on the cards. The lithium battery maker said that their recent results from a previously successful fast charging program has repeated itself again on a fast tracked program where the battery life showed no capacity loss after 250 cycles using a 15-minute charge. Shares closed 11.6 per cent higher at $0.575.

Meanwhile, Global Lithium Resources (ASX:GL1) sealed the deal to buy its 80 per cent stake in the Manna Lithium Project from Breaker Resources valued at $33 million. The offer was unveiled a week ago with the upfront consideration to be payable today. Shares closed 9.8 per cent higher at 95 cents.

Switching gears to the medical field, Mesoblast (ASX:MSB) met with the US FDA watchdog for skin therapies to discuss their letter. It addressed a cell therapy to treat severe inflammation due to a complication around bone marrow transplants for children. The health authorities requested more information to progress with its application. Shares closed 3.7 per cent higher at $1.41.

Residential property developer Peet (ASX:PPC) has inked a deal to buy Spirit Super’s 50 per cent holding in its Flagstone City project based in Queensland for $46.2 million. Shares closed flat at $1.06.

Futures

The Dow Jones futures are pointing to a fall of 74 points.
The S&P 500 futures are pointing to a fall of 9 points.
The Nasdaq futures are pointing to a fall of 29 points.
The SPI futures are pointing to a fall of 72 points when the market next opens.

Best and worst performers

All sectors closed in the red as sector with the fewest losses was materials down 0.3 per cent while the worst performer was property, down 1.6 per cent.

The best-performing stock in the S&P/ASX 200 was Paladin Energy (ASX:PDN) closing 6 per cent higher at $0.88, followed by shares in Regis Resources (ASX:RRL), and St Barbara (ASX:SBM).

The worst-performing stock in the S&P/ASX 200 was Clinuvel Pharmaceuticals (ASX:CUV) closing 4.8 per cent lower at $27.21, followed by shares in HUB24 (ASX:HUB), and Challenger (ASX:CGF).

Asian markets

Japan’s Nikkei is closed.
Hong Kong’s Hang Seng has gained 1.8 per cent.
China’s Shanghai Composite has gained 0.5 per cent.

Wall Street

Over the last four trading days, the Dow Jones gained 1.2 per cent, the S&P 500 gained 1.1 per cent and the Nasdaq gained 0.6 per cent.

With three more trading days to live up to the Santa rally, year to date the Dow has gained 20 per cent, the S&P 500 is up 29 per cent while the Nasdaq has boosted higher by almost 24 per cent. 

Commodities and the dollar

Gold is trading at US$1818.73 an ounce.
Iron ore futures are pointing to a rise of 0.44 per cent.
Light crude is trading $0.64 lower at US$76.35 a barrel.
One Australian dollar is buying 72.50 US cents.