The S&P/ASX 200 (INDEXASX: XJO) is tipped to rise when the market opens this morning, according to the latest SPI futures. Here’s your daily ASX morning report.
ASX 200 boosted by trifecta of COVID-19 vaccines
The ASX 200 saw another strong day, adding 1.3% on the back of the ‘trifecta’ of COVID-19 vaccines, with hopes for an economic recovery resulting in the oil price hitting a nine-month high. As can be expected, ASX energy shares benefitted most, the sector up 3.5% on the news.
The Beach Energy Ltd (ASX: BPT) share price increased 8.2%, whilst Origin Energy Ltd (ASX: ORG), which looks to be key to a gas lead recovery, added 5.2%. Santos Ltd (ASX: STO) also received approval for its controversial Narrabri gas exploration program, the share price improving 3.9% on the news.
Domestically, it was news of the Queensland border reopening that spurred a recovery in the travel sector, with the Webjet Limited (ASX: WEB) share price adding 4.7% on the news.
The gold sector remains under pressure with the AUD hitting a 3-month high of $0.74 against the USD, sending Newcrest Mining Limited (ASX: NCM) shares down 6.1%. Despite the current rotation, gold bullion, as opposed to gold stocks, should continue to play a key role as the threat of inflation rises in the coming years.
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Brickworks shares rally, TechnologyOne reports
Brickworks Limited (ASX: BKW) delivered one of the strongest updates of AGM season, reporting a 93% increase in net profit to $299 million, despite underlying profit falling 38% to $146 million due to 2019’s property gains. Back in September, management elected to increase the dividend by 4% on the back of the incredible success of Brickworks’ partnership with Goodman Group (ASX: GMG).
The company has partnered with Goodman to build custom distribution centres for the likes of Amazon (NASDAQ: AMZN), with its stake now valued at $727 million of a $2.0 billion asset base. Management now estimates the property asset backing of Brickworks shares is $25.24, well above the current Brickworks share price but importantly, its domestic building products division is ahead of 2019 volumes. Brickworks shares finished 4.0% higher.
TechnologyOne Limited (ASX: TNE) released its FY20 results, flagging the potential for a special dividend despite increasing its ordinary dividend by 8% on 2019 levels. The company reported strong demand for its enterprise management platform, as councils, governments and corporate sought to digitise. Underlying profit increased 13% to $86.1 million on the back of a 32% increase in recurring revenue to $134.6 million.
US markets post strong gains
The Dow Jones Industrial Average, a 30-stock index with a traditional focus on more cyclical, old fashioned companies, reached an all-time high of 30,000 points on Tuesday, with the 124-year-old Boeing Inc. (NYSE: BA) a key contributor.
The rally came on news of a third vaccine candidate, the fastest annual growth rate in US home prices in September at 7%, and confirmation that the White House had begun the process of transition to a Democratic president.
The S&P 500 and Nasdaq also added 1.6% and 1.5%, respectively, with growing confidence that the worst is over despite the threat of the impending Thanksgiving Day being a super spreader event for COVID-19.
In a sign that not all Chinese companies are losers from the trade war, smartphone maker Xiaomi (HKG: 1810) reported a 35% increase in sales in the third quarter, with the majority outside China, as the company grew market share at Huawei’sexpense. According to analysts, global shipments of Xiaomi’s phones increased 42%, well ahead of Apple (NASDAQ: AAPL) and Samsung (KRX: 005930).