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ASX extends best close since Feb 2020

·4-min read

Australia's share market eked out its best close since February 2020 as it nears a record, while US reporting season could make or break that bid.

The benchmark S&P/ASX200 index closed higher by 2.1 points, or 0.03 per cent, to 7065.6 on Monday.

The index extended its previous best close since February 2020, set last week.

The index is within 100 points of its record close, 7162.49, set in February last year, days before the coronavirus crash.

Meanwhile, the All Ordinaries reached a record 7358.8 points, extending a milestone set last week.

The broader index closed up by 2.2 points, or 0.03 per cent, to 7328 points.

Materials shares were strongest and rose 0.78 per cent. Iron ore traded for about $US175 per tonne.

The ASX's heights follow markets in the US. Optimism about economic recovery from the pandemic, low interest rates and vaccinations helped the Dow Jones and S&P 500 to record closes on Friday.

CMC Markets chief strategist Michael McCarthy had sage advice for those excited about where shares were heading.

"There is a lot of optimism and enthusiasm at the moment, but experience teaches us it won't last," he said.

Mr McCarthy said US companies reporting earnings in the next two weeks would have a significant impact on world shares.

"The major indices are strongly linked," he said.

"If we get a big leg up, or a big leg down from the US, it will have impact in Australia regardless of which companies cause it."

Overseas influences caused trouble for energy shares, which dropped 1.44 per cent.

Oil prices fell amid concerns that coronavirus infections in India and other countries will lead to restrictions on movement.

Origin and Beach lost about two per cent to $4.19 and $1.77 respectively.

There was brighter news domestically. Quarantine-free flights for Australians to New Zealand began, and should help travel and tourism.

A big mover on the ASX was metal recycling group Sims.

It jumped 8.95 per cent to $16.56 after giving full-year earnings expectations.

Sims said underlying earnings before interest and tax were expected to be between $260 million and $310 million. The company had a loss by the same measure of $57.9 million last financial year due to the pandemic.

Sims is benefiting from companies reducing their environmental impact, and spending on infrastructure.

Crown Resorts received a $3 billion funding proposal that would allow it to buy James Packer's stake in the gaming company.

The unsolicited approach was made by US-based Oaktree Capital Management.

Oaktree has proposed the proceeds be used by Crown to buy back some or all of the Crown shares held by Consolidated Press Holdings.

Shares were up 0.67 per cent to $12.00.

Lithium providers Galaxy and Orocobre proposed a $4 billion merger they claim would create the fifth-largest lithium provider in the world.

Orocobre has proposed buying all Galaxy shares. Galaxy shareholders would receive 0.569 Orocobre shares for each Galaxy share.

The proposal needs Galaxy shareholders, court and other approvals.

Galaxy shares were up 6.09 per cent to $3.83.

Orocobre shares were up 5.65 per cent to $6.55.

In mining, Fortescue and Rio Tinto had gains of almost two per cent to $21.20 and $120.85 respectively.

The Commonwealth was best of the big four banks. It rose almost one per cent to $88.84.

On Tuesday, the Reserve Bank will release the minutes of its April 6 board meeting. The gathering left the cash rate at a record low 0.1 per cent.

Rio Tinto will give a first quarter production update.

The Australian dollar was buying 77.42 US cents at 1723 AEST, higher from 77.39 US cents at Friday's close.

ON THE ASX

* The benchmark S&P/ASX200 index closed higher by 2.1 points, or 0.03 per cent, to 7065.6 on Monday.

* The All Ordinaries closed up by 2.2 points, or 0.03 per cent, to 7328 points.

* At 1723 AEST, the SPI200 futures index was up by five points, or 0.07 per cent, to 7055.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 77.42 US cents, from 77.39 cents on Friday

* 84.01 Japanese yen, from 84.26 yen

* 64.64 Euro cents, from 64.66 cents

* 55.93 British pence, from 56.33 pence

* 108.22 NZ cents, from 108.12 cents.