Categories
News

Australian share market rises as Qantas shares rally, Wall Street rebounds on tech gains


The Australian share market has risen, with Qantas shares up strongly after the airline secured more funding to help it through the coronavirus crisis.

By 12:15pm AEST, the ASX 200 was up by 1.3 per cent to 5,389 points, while the All Ordinaries index had gained 71 points to 5,461.

Most sectors were higher, led by energy and industrials, while healthcare was the weakest-performing sector, with shares in Resmed (-2.5pc) and Mayne Pharma (-1.2pc) falling.

Qantas shares had gained 3.2 per cent to $3.67, after initially climbing as much as 5.6 per cent higher.

The airline has obtained an additional $550 million in debt funding, secured against three of its Boeing 787-9 aircraft, and says it could raises extra funds against other aircraft assets if needed.

Qantas expects to burn through cash at a rate of $40 million per week by the end of June.

Flight cancellations have been extended across Qantas and Jetstar, with domestic and New Zealand flight cuts now running until the end of June, and international capacity cuts to remain in place through to the end of July.

However, the airline says there is some capacity for domestic and trans-Tasman flights to be added back in if restrictions are eased in coming weeks.

It says more than 25,000 employees have been stood down.

“The impact of this stand-down is deeply regrettable but has been greatly softened by the Australian Government’s JobKeeper program.”

Collins Foods, the company behind franchises including 240 KFC stores in Australia, was among the best performers of the session so far, with shares up 9.2 per cent to $7.51.

The company said KFC stores in shopping centre food courts had been heavily affected by a drop in foot traffic due to coronavirus restrictions, but sales grew across the remainder of its network, which is largely made up of drive-through restaurants.

Wall Street boosted by tech giants

Stocks on Wall Street ended higher overnight, led by gains for technology giants, offsetting concerns about renewed tensions between the US and China.

Rising oil prices also helped lift the major US indices, which had opened lower but edged up to end a two-session losing streak.

The Dow Jones Industrial Average rose 26 points or 0.1 per cent to 23,750 after a volatile session.

The S&P 500 gained 12 points, or 0.4 per cent, to 2,843 and the Nasdaq Composite added 106 points, or 1.2 per cent, to 8,711.

Gains in Microsoft, Apple and Amazon were the biggest lifts for the S&P 500.

Sentiment was helped by New York Governor Andrew Cuomo outlining a phased reopening of business in the US state hardest hit by the COVID-19 pandemic.

However, Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey, said caution remained.

Billionaire Warren Buffett’s Berkshire Hathaway held its annual meeting and announced it had dumped its stakes in airline stocks, sending the sector tumbling.

Shares in Delta Air Lines, American Airlines, Southwest Airlines and United Airlines fell between 5 and 8 per cent.

US to borrow record $3 trillion

The US Treasury Department plans to borrow a record $US3 trillion in the second quarter of 2020 as it battles the economic destruction from the coronavirus.

In a statement, the Treasury said it would borrow $US2.99 trillion over April to June, more than it would borrow in a normal year.

Total US government debt is nearly $US25 trillion and the deficit for the current financial year stands at $US744 billion.

Economic indicators continued to show the fallout of the pandemic — new orders for US-made products suffered a record fall last month.

Factory orders dropped 10.3 per cent, the largest decrease since the series started in 1992, while over the year to March they declined 2.8 per cent.

It was a sea of red on European markets amid their own weak manufacturing data, with heavy falls in Paris (-4.2pc), Frankfurt (-3.6pc) and for the pan-European Stoxx 50 index (-2.3pc).

London’s FTSE 100 posted a more modest 0.2 per cent decline to 5,754 points.

West Texas crude oil surged almost 7 per cent to $US21.10 a barrel and spot gold dipped to $US1,701 an ounce.

Business backs COVIDSafe app

Business groups and leaders have called for Australians to download the Federal Government’s COVIDSafe.

More than one hundred prominent Australians have urged the community to download the coronavirus tracking app to head off a second wave of infections.

The former boss of the defence force, Air Chief Marshall Sir Angus Houston, and Commonwealth Bank chair Catherine Livingstone are among the individuals and organisations who have made the call on the ‘Endorse CovidSafe’ website set up by University of Sydney academics.

Major Australian companies, including Coles and Woolworths, associations such as the National Rugby League and the Australian Banking Association, and small business owners have also publicly encouraged people to install the app.

Website co-founder, University of Sydney economics professor Robert Slonim, said not enough people had signed up to CovidSafe and that would make it it hard to contact trace if there was another wave of infections, as happened in Singapore.

“We are concerned citizens who believe that without a massive immediate downloading of the app in Australia then not enough people will install the technology for it to be effective,” Professor Slonim said.

“With government restrictions now being eased and without effective contact tracing, there is the big risk of a second wave of infections.”

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume.

How coronavirus turned property on its head



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *