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ASX rallies late as US futures point to Wall St rebound; RBA remains optimistic despite Omicron

ABC Business logoABC Business 20/12/2021 By business reporter Samuel Yang and wires

Australian shares have rallied during the afternoon to post solid gains, as US share futures point to a positive session on Wall Street tonight.

After trading flat for most of the morning, the ASX 200 share index closed 0.9 per cent higher at 7,355, with the All Ordinaries up the same amount to 7,667.

Wall Street's S&P 500 futures were trading 0.8 per cent higher around 7:00pm AEDT, hinting at a positive start for the US market.

Healthcare, energy and mining stocks led the gains, with only real estate and education easing.

Medical equipment company Nanosonics led the ASX 200 with a 7.5 per cent rise to $6.34, while biotechs CSL (+4.9pc) and Polynovo (+4pc) also made the top 10 gainers on the benchmark index. 

Buy now, pay later company Zip Co also found some friends after its recent heavy sell-off, rising 5.1 per cent to $4.34.

Likewise, Magellan's share price stabilised today, rising 4.4 per cent, having slumped more than 30 per cent on Monday after the fund manager lost a major client.

Energy stocks gained 1.7 per cent, rebounding from a sharp drop on Monday, as oil prices stabilised after an overnight drop on demand concerns.

Whitehaven Coal climbed 4.5 per cent, while oil and gas explorer Santos added 0.8 per cent.

The Australian dollar was fairly steady throughout the session at 71.1 US cents.

RBA upbeat on fiscal outlook

The Reserve Bank said it is optimistic that the spread of the Omicron variant will not derail an ongoing economic recovery, giving it the option to end quantitative easing early next year should the run of activity data stay upbeat.

Minutes of the RBA's policy meeting on December 7 showed that its board remained committed to keeping interest rates at 0.1 per cent, but was considering how and when to wind up its $4 billion in weekly bond buying given the economic pick up.

"Members observed that the Australian economy was rapidly recovering after the interruption to growth caused by the outbreak of the Delta variant," the minutes released on Tuesday noted.

"The emergence of the Omicron variant was a new source of uncertainty, but it was not expected to derail the recovery."

Options to be considered at the next Board meeting in February included extending bond buying to May at the same or reduced amount, or ending it altogether in February.

The decision would depend on how the economy fared, with data on jobs, inflation and spending particularly important.

Meanwhile, Commonwealth Bank has released new research today tipping Australians to spend $4 billion at retailers across the country in this year’s Boxing Day sales.

However, the spend on the traditional sales event of Boxing Day has already been eclipsed by pre-Christmas sales.

The Black Friday to Cyber Monday sales period was expected to net retailers $5.4 billion.

Figures from the major banks and also the ABS show that November is overtaking December as the biggest retailing month of the year as consumers take advantage of sales events to get their Christmas shopping done early.

China influencer fined for tax evasion

China's "queen of livestreaming" has been fined 1.34 billion yuan ($300 million) for tax evasion, Chinese tax authorities said on Monday.

Internet celebrity Viya, whose real name is Huang Wei, was fined for hiding personal income and other offences in 2019 and 2020, according to the tax bureau in Hangzhou, a city in southern China.

She later apologised.

"I'm deeply sorry about my violations of the tax laws and regulations," she said on her Weibo account.

"I thoroughly accept the punishment made by the tax authorities."

Viya, 36, is known for her ability to sell "anything" via livestreaming on the Taobao Live platform. Last year, she sold a rocket launch service for 40 million yuan.

In a recent online shopping festival known as Singles' Day she sold products worth a total of 8.5 billion yuan in one evening, according to media reports.

Viya is the latest celebrity live streamer to get caught up in a broad crackdown that initially targeted tech monopolies but has since gone on to take aim at private education, social media platforms and the culture of celebrity.

Global markets reeling amid Omicron concerns

US stock indexes retreated by more than 1 per cent on Monday as investors worried about the Omicron COVID-19 variant potentially undercutting the economic rebound and a critical setback to President Joe Biden's social spending bill.

The Dow Jones Industrial Average fell 433 points, or 1.2 per cent, to 34,932, the S&P 500 lost 53 points, or 1.1 per cent, to 4,568 and the Nasdaq Composite dropped 189 points, or 1.2 per cent, to 14,980.

Financials fell 1.9 per cent and materials dropped 1.8 per cent.

Microsoft and Tesla were the biggest individual weights on the S&P 500, falling 1.2 per cent and 3.5 per cent respectively.

The indexes finished above their session lows, but the benchmark S&P 500 ended below its 50-day moving average, a key technical level.

Coronavirus cases surged in New York City and around the United States over the weekend, dashing hopes for a more normal holiday season.

Britain's leader said he would take more steps to slow the spread of Omicron if needed, after the Netherlands began a fourth lockdown and as other European nations considered restrictions.

European and UK stocks hit two-week lows, dropping 1.3 per cent and 1 per cent respectively.

MSCI's index of Asia-Pacific shares outside Japan fell 1.7 per cent yesterday to its lowest in a year and the world stocks index hit its lowest in nearly two weeks.

Emerging market stocks also hit their lowest in a year.

Investors feared that new restrictions would weigh on fuel demand, sending oil prices lower.

"It was kind of a triple whammy on the economy over the weekend — Omicron, the Fed, and taking the fiscal initiative off the table," said Jack Ablin, chief investment officer at Cresset Capital Management.

"The market is taking a hit. I think it's an economic reset that investors are kind of gauging."

On oil markets, Brent crude was down 3.1 per cent to $US71.25 a barrel this morning.

ABC/Reuters


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