Wall St extends gains for 4th day, Telstra, Flight Centre, Healius, BHP, REITS on watch: ASX to rise

An almost a broad rally across the major indexes around the globe amid rising signs of progress in peace talks between Russia and Ukraine. Moscow is set to pull back military action around Kyiv and northern Ukraine. Oil prices extended recent losses.

Good morning. The bulls are back. I’m Melissa Darmawan for Finance News. This is your market outlook.

The Australian sharemarket is set to rally on growing investor sentiment

US stocks close at session highs

Wall St rallied to the close as investors monitor negotiations between Russia and Ukraine. Investors showed their optimism, piling back into stocks on talks with Russia, saying it will pull back some of its operations in parts of Ukraine. A Russian negotiator described the talk in Istanbul as “constructive”.

Stocks rose for its fourth straight day as tech shares outperformed for its second straight day. The major indexes have been advancing for two weeks in a row, while in the bond market, the inverted yield curve is indicating signs of recession risk.

Despite the uncertainties, dip buyers came in and bought into these beaten down tech stocks. The sector is up for the day and down for the year while the S&P 500 is shy of 5 per cent to a new record high.

Continuing on the tech theme with Apple shares in focus, so goes Apple, so goes the market. The share price rallied for its longest winning streak since 2003, closing 1.9 per cent higher to US$178.96. They are also not far off the US$3 trillion market cap after hitting it in January, it’s now at US$2.9 trillion.

Failed ceasefire sends oil prices lower

Weakness in the oil price continued after the price of crude soared earlier on when the war began. Saudi Arabia’s energy minister said today that OPEC+ will prioritise global needs and keep geopolitics out of it when it comes to making decisions about oil output. So it will put the “common good” first in order to stabilise volatile energy prices.

This also gave support for equities, as lower oil prices translates to lower energy costs for transportation for example, therefore this reduces the pressure for companies to pass down higher prices, and this means consumers will be able to spend more with the income they have.

The oil market has been tight for some time and will continue to be as increasing output takes time, especially after the Biden administration doesn’t anticipate selling offshore drilling rights in the Gulf of Mexico through at least October 2023. Russian oil output is expected to fall given the growing financial sanctions from the West.

Inflation fighting in focus, consumer confidence edges higher

Meanwhile in fresh economic data, consumer confidence rose slightly in March after two months of declines, and after February’s numbers were revised lower as per The Conference Board while job openings were little unchanged.

The focus with the Fed now is to fight soaring inflation, also wages growth is the key focus now both here in Australia and in the US. This will be something to keep an eye out on when the big jobs report on Friday night our time unveils on Wall St.

Figures around the globe

At the closing bell, the Dow Jones gained almost 1 per cent to 35,294, the S&P 500 gained 1.2 per cent to 4,632 and the Nasdaq rose 1.8 per cent to 14,620.

Across the S&P 500 sectors it is almost a broad based rally with energy as the only loser, down 0.5 per cent, however for the year, it’s up by 38 per cent as the best performer. Real estate was the clear winner by 2.9 per cent, info tech added 2 per cent, followed by consumer discretionary, and communication services.

The yield on the 10-year treasury note fell 9 basis points to 2.39 per cent, however during the session, for a very brief moment, the yield on the 2-year was higher than the 10-year yield, so yes a yield curve inversion, the first time since September 2019. There was weakness in both gold and the greenback as we saw rotation back into risk.

Across the Atlantic, European markets closed higher. Paris gained 3.1 per cent, Frankfurt added 2.8 per cent while London’s FTSE rose 0.9 per cent.

On the London Stock Exchange, Rio lost 0.3 per cent, BP dropped 2.5 per cent and Shell fell 1.9 per cent.

Asian markets closed mixed. Tokyo’s Nikkei gained 1.1 per cent amid a weaker yen and its central bank intervening to stop borrowing costs from rising further, by capped gains in 10-year bond yields. Hong Kong’s Hang Seng also added 1.1 per cent while China’s Shanghai Composite fell 0.3 per cent.

Yesterday, the Australian sharemarket closed 0.7 per cent higher at 7,464, rallying for its sixth straight day, charged higher by information tech offsetting losses in materials and energy.

For a breakdown of the stocks that rallied ahead of the Federal Budget and why, join me here  for “ASX rises ahead of Federal Budget as stocks perform, closes 0.7% higher”.

SPI futures

Taking all of this into the equation, the SPI futures are pointing to a 0.8 per cent gain.

What to keep an eye out for

Following a ‘risk on’ feel on Wall St, tech shares could be set to rally for its second straight day. We see some softness in the base metals and the iron ore price amid mobility restrictions in China as they lockdown 25 million residents. This could be the local miner’s achilles heel.

The Federal Budget was handed down last night so there are several stocks to watch as companies are set to be beneficiaries of this spend.

Keep an eye out for travel bookers like Flight Centre Travel (ASX:FLT) amid a pledge of a $60 million spend to bring back international visitors. Also healthcare stocks like Healius (ASX:HLS) and Virtus Health (ASX:VRT) amid the government’s commitment to help couples with pregnancy.

Telstra (ASX:TLS) shares could be on the move as Vicky Brady is named as CEO replacing Andrew Penn after seven years in a row.

A couple of broker moves, BHP (ASX:BHP) and Rio Tinto (ASX:RIO) received an upgrade at Liberum, JP Morgan cut Uniti Group (ASX:UNI) to neutral with a boosted price target of $5. Gold Road Resources (ASX:GOR) also cut its rating to a hold from buy and raised its target price to $1.70.

There are 28 real estate investment trust stocks trading ex-dividend today so we might see some weakness in this sector today.

Ex-dividend

Australian Unity Office Fund (ASX:AOF) is paying 3.8 cents unfranked
Arena REIT No 1 (ASX:ARF) is paying 4.05 cents unfranked
Centuria Industrial REIT (ASX:CIP) is paying 4.325 cents unfranked
Charter Hall Long WALE REIT (ASX:CLW) is paying 7.63 cents unfranked
Cromwell Property Group(ASX:CMW) is paying 1.625 cents unfranked
Centuria Office REIT (ASX:COF) is paying 4.15 cents unfranked
Cosol (ASX:COS) is paying 0.92 cents fully franked
Charter Hall Social Infrastructure REIT (ASX:CQE) is paying 4.4 cents unfranked
Cedar Woods Properties (ASX:CWP) is paying 13 cents fully franked
Dexus Convenience Retail REIT (ASX:DXC) is paying 5.825 cents unfranked
Dexus Industria REIT (ASX:DXI) is paying 4.325 cents unfranked
Elanor Commercial Property Fund (ASX:ECF) is paying 2.35 cents unfranked
Gryphon Capital (ASX:GCI) is paying 0.77 cents unfranked
Garda Diversified Property Fund (ASX:GDF) is paying 1.8 cents unfranked
Healthco Healthcare and Wellness REIT (ASX:HCW) is paying 2.25 cents unfranked
Homeco Daily Needs (ASX:HDN) is paying 2.08 cents unfranked
Hearts and Minds (ASX:HM1) is paying 13.5 cents fully franked
Kkr Credit Inc Fund (ASX:KKC) is paying 1 cents unfranked
Newmark Property (ASX:NPR) is paying 2.41 cents unfranked
Perpetual Credit Income Trust (ASX:PCI) is paying 0.412 cents unfranked
Qualitas Real Estate Income Fund (ASX:QRI) is paying 0.6932 cents unfranked
RAM Essential Services Property Fund (ASX:REP) is paying 1.4541 cents unfranked
Rural Funds Group (ASX:RFF) is paying 2.9331 cents unfranked
360 Capital Enhanced Income Fund (ASX:TCF) is paying 3 cents unfranked
360 Capital Group (ASX:TGP) is paying 1.5 cents unfranked
360 Capital REIT (ASX:TOT) is paying 1.5 cents unfranked
Waypoint REIT (ASX:WPR) is paying 4.11 cents unfranked
WCM Global Growth (ASX:WQG) is paying 2.75 cents fully franked

Dividend-pay

There are 12 companies set to pay eligible shareholders today

AGL Energy (ASX:AGL)
Aurizon Holdings (ASX:AZJ)
Commonwealth Bank Of Australia (ASX:CBA)
Contact Energy (ASX:CEN)
Ellerston Asian Investments (ASX:EAI)
Fortescue Metals Group (ASX:FMG)
GQG Partners Inc (ASX:GQG)
Orora (ASX:ORA)
Sandfire Resources (ASX:SFR)
Tassal Group (ASX:TGR)
Wesfarmers (ASX:WES)
Worley (ASX:WOR)

Commodities

Iron ore has gained 0.4 per cent to US$152.95. Its futures point to a 1.2 per cent fall.

Gold has lost $20.90 or 1.1 per cent to US$1924 an ounce. Silver is down $0.28 or 1.1 per cent to US$24.92 an ounce.

Oil has fallen $1.07 or over 1 per cent to US$104.89 a barrel.

Currencies

One Australian Dollar at 7:40 AM has strengthened from yesterday, buying 75.09 US cents (Tue: 74.93 US cents), 57.35 Pence Sterling, 92.27 Yen and 67.73 Euro cents.