Coca-Cola Amatil shares closed at the highest level in five years on Tuesday amid strong demand on the ASX for any stocks apart from gold miners and fire-affected companies. Shares in the drinks maker gained 5 per cent to $11.54. Huge amounts of bottled water have been delivered to bushfire-affected communities in recent days.
The S&P/ASX 200 Index had its biggest gains for three weeks, closing 1.4 per cent higher at 6826.4 points. The session ended with only 27 companies in red. This surprisingly strong performance followed modest leads from Wall Street, but shows ongoing strong demand for equities whenever they dip in price. Asian markets also rose, with the Nikkei up 1.5 per cent and the Hang Seng and Shanghai 300 both up 0.4 per cent.
“Wall Street rallied tentatively overnight as Iran fears faded in the memory of investors as quickly as they had begun, and strong PMIs [purchasing manufacturing indices] globally boosted sentiment,” said senior market analyst with Oanada, Jeffrey Halley.
The two-day sell-off on Friday and Monday presented opportunities for investors to buy at better levels, he added.
“The positive sentiment is likely to continue for the remainder of the day as the underlying drivers of the stock market rally – the search for yield and global economic recovery – reassert themselves. Only geopolitical headlines surprises from the Middle East are now likely to derail the rally.”
The biggest gain on Tuesday was biotech PolyNovo, up 11.8 per cent to $2.03 after revealing a record $2 million worth of sales in December. Lithium miners Orocobre and Pilbara gained about 7 per cent to $3.04 and 31¢ respectively. The biggest decline was 3.9 per cent in gold miner Resolute to $1.23, with fellow gold miners Regis Resources, Gold Road Resources, Evolution, Newcrest, and Northern Start also dropping significantly.
Ingenia Communities fell 3.8 per cent to $4.61 after it revealed two homes were burnt at its Lake Conjola over-55s estate on the NSW south coast. It said forced tourist evacuations would reduce revenue and send earnings to the lower end of guidance. Kangaroo Island Plantation Timbers suspended shares for the rest of the month while it assessed fire damage.
Communications were up 1.9 per cent with Telstra rising 2.5 per cent to 3.71. This was Telstra’s best one-day performance since November 28, 2019.
Consumer staples had a strong day with Wesfarmers hitting record highs and closing at $43.07. However, gains in consumer staples were not universal as rural services business Elders fell 1.7 per cent to $6.17. Elders shares have lost 6 per cent since the start of the year.
Source: Thanks smh.com