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ASX ends 2.5pc up, best session since June

Steven Deare
·4-min read

Australia's share market has had its best session since June 16 as fund managers bought in after a negative September and a big-spending federal budget looms.

The S&P/ASX200 benchmark index closed higher by 150.1 points, or 2.59 per cent, to 5941.6 points on Monday.

The gain is the best since the 3.89 per cent jump of June 16.

The All Ordinaries index finished up by 151.9 points, or 2.54 per cent, to 6135.1.

Energy was the best sector, higher by 4.51 per cent, followed by financials, which gained 3.74 per cent.

The surge came a day ahead of what is tipped to be a big spending federal budget on Tuesday, aimed at helping the economy emerge from the coronavirus recession.

The plan includes $7.5 billion in fast-tracked road and rail projects, a $1.5 billion manufacturing strategy and the possibility of bringing forward personal tax cuts to encourage spending.

However, Bell Direct market analyst Jessica Amir said the budget was only a part of the reason for the ASX's rise.

She said fund managers were repositioning portfolios after a negative September.

The ASX200 had its first monthly decline (4.04 per cent) last month since the 21.18 per cent coronavirus crash in March.

Ms Amir said fund managers in September sold defensive stocks such as consumer staples and health care, and were turning to ones that would rally on the economy's reopening, including miners and industrials.

"The economy moves in cycles. We're moving from a negative phase to a growth phase. So the focus is on the rebound," Ms Amir said.

While Victoria on Monday recorded no deaths of people with the virus for the first time since September 15, the situation remains worrying overseas.

New York will soon close non-essential businesses amid high infection rates across the country, while European countries including the UK and Spain are battling rising infection rates.

The National Australia Bank monthly business survey showed its conditions index rose by a further six points in September.

While conditions are back around the levels seen in early 2020, at an index of zero, they remain well below average.

Yet gloom continued for Australia's car market in September with demand for new vehicles falling by almost 22 per cent.

The Federal Chamber of Automotive Industries said 68,985 new cars and commercials were sold last month, down 21.8 per cent on the 88,181 in September last year.

On the market, Oil Search was one of the best energy performers. Shares were higher by 7.54 per cent to $2.71.

Among the banks, ANZ was higher by 4.22 per cent to $17.80, the Commonwealth was up 3.56 per cent to $65.99, NAB rose by 4.0 per cent to $18.19 and Westpac was better by 4.35 per cent to $17.29.

In mining, BHP rose by 2.9 per cent to $36.14, Rio Tinto increased by 2.24 per cent to $95.70 and Fortescue climbed by 2.36 per cent to $16.46.

Copper miner Oz Minerals has completed the purchase of Cassini Resources for what management hope will prove a long-life copper-nickel mine in Western Australia.

Oz Minerals said it had acquired all the shares of Cassini, which will be delisted from the ASX.

Shares in the former finished higher by 3.89 per cent to $13.90.

Dairy giant Fonterra will pay down debt with the proceeds from the sale of Chinese farms.

The New Zealand co-operative expects to make $NZ555 million ($A514 million) from the sale of two farming hubs and a majority stake in another farm to Inner Mongolia Natural Dairy Co.

Shares finished better by 1.08 per cent to $3.76.

The Reserve Bank's cash rate decision is also due on Tuesday. The target stands at 0.25 per cent.

The Aussie dollar was buying 71.74 US cents at 1724 AEDT, higher from 71.41 US cents after the close of trade on Friday.

ON THE ASX

* The S&P/ASX200 benchmark index closed higher by 150.1 points, or 2.59 per cent, to 5941.6 points on Monday.

* The All Ordinaries index finished up by 151.9 points, or 2.54 per cent, to 6135.1.

* At 1724 AEDT, the SPI200 futures index was lower by six points, or 0.1 per cent, to 5920.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 71.74 US cents, from 71.63 US cents on Friday

* 75.73 Japanese yen, from 75.32 yen

* 61.18 Euro cents, from 61.05 cents

* 55.48 British pence, from 55.63 pence

* 108.01 NZ cents, from 107.84 cents