ASX hits record high, resource stocks are big winners

Despite the surge in Covid cases in New South Wales and Victoria, the active resource industry and the active leadership of Wall Street pushed ASX to record highs.

As Wall Street actively led the gains, the Australian stock market climbed to new highs, and resource stocks led the gains. There are many reasons to feel bullish about the industry.

The benchmark S&P/ASX200 index soared 1.06% to 7386.4-a record closing high, only 20 points from the all-time high of 7406 set on June 16-while all common stock indexes rose 1.03% to 7658.9.

CommSec analyst Steve Daglian said: “The Australian market continues to gain direction from the US stock market, which happened to rise by about 0.8% last night.”

“This is very helpful, and that’s why the market rose for the second day in a row.”

Before the record close, Mr. Daglian said that ASX has not rushed forward since reaching its highest level on June 16, trading within a narrow range of 200 points.

He said: “Part of the reason is the fear of the spread of the delta variant of the coronavirus and of course the uncertainty of the lockdown.”

However, the new peak came after the frustrating news of Victoria, which recorded 26 new local infections — the state’s highest number of single-day cases this year — and New South Wales this time. On the worst day of the epidemic, there were 124 new cases.

The energy sector performed best, rising 2.5%.

Woodside rose 3.2% to $22.58, Origin rose 2.5% to $4.48, Santos rose 2.59% to $6.74, and its acquisition target Oil Search rose 0.99% to $4.08.

The materials sector ranked second, up 2.2%.

BHP Billiton’s share price rose 3.13% to A$51.45 after announcing a deal with Elon Musk’s Tesla. The deal comes from nickel in its Nickel West business in Western Australia, and through cooperation to determine the use of more renewable energy and battery storage. Combining methods to reduce carbon emissions from their respective businesses.

At the same time, Ord Minnett stated that the probability of BHP Billiton’s withdrawal from oil-reportedly but not confirmed by miners-is high, but if it does happen, it may take several years.

Rival Rio Tinto rose 1.22% to US$127.41.

As the profit reporting season approaches, Mr. Daghlian and his economist colleagues Craig James and Ryan Felsman pointed out that, driven by the soaring iron ore prices, ASX200’s profit expectations have soared to the lowest level in 2008, leading to materials companies Earnings increased.

As iron ore prices remain at around US$220 per ton-more than 30% higher than previous historical highs-Westpac’s Robert Rennie advises shareholders of BHP Billiton, Rio Tinto and Fortescue to expect record dividends.

CommSec said: “The earnings results for the next six weeks should justify the current high valuation of the Australian stock market.”

“The difficult part is what will happen next. Given the high degree of uncertainty in the health and economic outlook, we conservatively predict that the S&P/ASX 200 index will be in the range of 7,400-7,700 points by mid-2022. “

OMG CEO Ivan Tchourilov said that the lithium industry is “on fire.”

“Orocobre’s quarterly report released today does highlight the company’s unique position in capitalizing on the growing demand for Australian lithium,” he said.

“With the increase in global electric vehicle production, this trend shows no signs of slowing down, among which lithium-ion batteries are a key factor.”

Orocobre rose 9.9% to $7.65.

Syrah Resources’ stock price soared 10.09% to US$1.25 a day. The previously released quarterly report showed that its production growth of natural graphite (used to make lithium-ion batteries) is proceeding ahead of schedule, and the disruption of the global container shipping market means it cannot satisfy all customers Demand.

After the Australian Securities Exchange asked it to explain the reasons for its stock price surge, Piedmont Lithium surged 13.14% to 77.5 cents, plummeting from 87 cents on Tuesday to 65 cents on Wednesday, and then entered a trading halt.

Piedmont responded that there are some media reports that there is an ambitious project in Gaston County, North Carolina, local zoning and other approved projects, which confirmed that a “constructive work meeting with the county was held on Tuesday, and the company is fortunate. Attended the meeting”. “.

According to the report, most county officials may block or postpone the project because of environmental issues.

Galaxy Resources, another lithium miner, rose 9.5% to $4.38 after its quarterly activity report performed well.

The engineering and construction group Cimic performed strongly again. After investors responded well to its half-year report released on Wednesday, its share price rose 6.3% to $21.10.

Mr. Tchourilov said: “After several downgrades in the past 12 months, the stock price has incorporated many negative factors.”

“There is no accident in this report, and there is no skeleton in the cabinet. This has proved to be a’beat’ in the eyes of investors.”

Due to business updates, the share price of buy-and-pay provider Zip fell 7.78% to US$6.99.

After Jefferies analysts raised the stock from holding to buying, Commonwealth Bank rose 1.48% to $99.88, saying that it should have a price premium compared with its peers because it performs better than its peers in operation. Reflected in the continued growth of housing/deposit market share.

ANZ Bank rose 1.27% to US$28, National Australia Bank rose 1.17% to US$26.04, and Westpac rose 0.69% to US$24.93.

In the afternoon trading, the Australian dollar exchange rate against the US dollar was 73.71 US cents, 53.67 pence and 62.45 Euro cents.

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About the Author: Agnes Zang