ASX Close: No worries about recession as market climbs

via The Market Herald

The Australian share market took back all of yesterday’s lost ground today despite the confirmation of our first official recession in 30 years.

New data from the Australian Bureau of Statistics shows that Australia’s gross domestic product (GDP) shrunk seven per cent over the June quarter — the second consecutive quarterly retraction after GDP shrunk 0.3 per cent over the March quarter.

Nevertheless, investors didn’t seem too phased. The official recession was expected in light of the COVID-19 carnage from the first half of the year, and as such, the market seemed more concerned with bargain-hunting and overseas leads today.

The S&P 500 and Nasdaq indexes hit new record closes last night, setting the local market up for its own happy day. The ASX 200 tacked on 1.84 per cent or 109.8 points to close at 6063.2 — almost exactly where it sat before yesterday’s sell-off.

All 11 sectors closed a health shade of green today, with our heavy-weight resource stocks enjoying a slightly lower Australian dollar. Our iron ore giants led the charge as BHP gained 2.67. per cent, Fortescue gained 2.27 per cent, and Rio Tinto gained 1.55 per cent. Our gold stocks kept the sector modest with Newcrest closing lower by one per cent, Northern Star by 1.39 per cent, and Saracen by 1.69 per cent.

The other pillar of our market, the financials sector, propped things up further as each of our big four banks closed green. ANZ and Westpac tied for the pick of the litter today, each up 1.58 per cent. Meanwhile, Commonwealth Bank gained 1.23 per cent and NAB gained 1.26 per cent. Investment banker Macquarie Group closed 1.64 per cent higher.

Things were just as bright among our consumer sectors as retailers and leisure stocks alike posted healthy gains. Supermarket giants Woolworths and Coles gained 2.64 per cent and 1,03 per cent, respectively. Metcash, which runs IGA, gained 3.16 per cent. Rob Scott’s Wesfarmers gained 2.29 per cent, while Aristocrat Leisure gained 4.48 per cent and Tabcorp gained 1.43 per cent.

Gains on the tech sector were largely held back by our buy now, pay later stocks, however. Yesterday, Paypal announced it was thrusting itself into the BNPL sector yesterday and locally listed fintech stocks were rattled. Today, Afterpay slumped another 1.89 per cent, Zip Co tumbled 11.64 per cent, and Sezzle dropped 3.77 per cent.

Taking a look at our neighbours to the east, it’s a mixed day for Asian markets. The Asia Dow and the Nikkei 225 index are sitting green and up 0.35 per cent and 0.45 per cent, respectively. However, the Hang Seng and Shanghai Composite are red, down by 0.05 per cent and 0.17 per cent, respectively.

The Australian dollar has retreated from yesterday’s two-year high and is currently buying 73.57 US cents, 55 pence, and 12.25 South African Rand.

Today’s ups and downs

Tech developer BrainChip (ASX:BRN) soared once more today after signing a deal that could send its Akida neuromorphic processor to space. The deal was struck with VORAGO Technologies to support a first-phase NASA program for a neuromorphic processor that meets spaceflight requirements. Shares in BRN closed 53.23 or cent higher at 48 cents each. This time last year, BrainChip shares were worth just four cents.

Meanwhile, investment manager IOOF Holdings (ASX:IFL) slumped after raising a neat $734 million at a major discount. The company tapped institutions for the funds by pricing new shares at $3.50 each — a discount of nearly 25 per cent to the company’s last closing price. It seems mum and dad investors wanted a piece of the action, and IOOF shares today closed 22.68 per cent lower at $3.58 each.