Aust shares recover early lockdown losses

·4-min read

A late rally on a day blighted by coronavirus lockdowns helped the ASX be one of the better performers among Asian markets.

The market fell as low as 0.9 per cent following a newly declared three-day lockdown for parts of Queensland, and a four-day one for Perth, as the Delta variant spreads.

People there join residents of Sydney and surrounds (two weeks) and Darwin (four days) in staying at home.

Yet a spate of buying in the latter part of the day helped investors recoup almost all their losses.

ThinkMarkets analyst Carl Capolingua was pleased.

"We're doing pretty well. Compared to what happened in Asia, we're way ahead," he said.

Markets in Japan, Shanghai and Hong Kong were close to one per cent lower at the time of writing.

Many Asian countries are also battling more infectious strains of the virus and tightening rules.

Meanwhile the benchmark S&P/ASX200 index closed lower by 6.1 points, or 0.08 per cent, to 7301.2 on Tuesday.

The All Ordinaries closed down by seven points, or 0.09 per cent, to 7565.5.

Traders had a mostly positive lead from the US. Tech stocks helped the Nasdaq and S&P 500 to all-time highs.

Technology shares proved best on the ASX and were higher by 0.65 per cent.

Despite the COVID-19 worries, the ASX200 remains only a little short of its record close of 7386.1, set on June 16.

Mr Capolingua said the comeback in the latter part of the trading day was driven by financial stocks. These closed 0.18 per cent higher.

He said the rally showed there had been investors waiting to pounce on the COVID lows.

"It speaks to the demand that is there waiting to buy the dip," he said.

"If others are waiting to buy the dip and it doesn't come, where does it put them.

"So within that context, we've had a very positive day."

Higher commodity prices, and banks regaining money set aside for earlier pandemic losses, were all playing in the market's favour, Mr Capolingua said.

Yet the coronavirus remains unpredictable.

"COVID continues to be the key factor determining where we'll be down the track," Mr Capolingua said.

On the ASX, Genworth Mortgage Insurance fell 15.75 per cent to $2.14 after revealing it could have a tough time renewing contracts with the Commonwealth Bank.

The bank will call for lenders mortgage insurance services from the wider market once its exclusive contract with Genworth expires.

The latter has provided the services to the bank for more than 50 years.

The bank proved best of the big four and closed higher by 0.61 per cent to $100.48.

Outdoor goods retailer Kathmandu says sales and earnings have been hit by recent coronavirus lockdowns in Australia, particularly in NSW and Victoria.

Some 40 stores are closed in NSW due to a two-week lockdown that won't end until July 9.

Another 26 are closed in Western Australia, which on Tuesday began a four-day lockdown.

Shares were down by 4.05 per cent to $1.42.

KFC and Taco Bell operator Collins Foods posted a gain in full-year earnings of 1.5 per cent.

KFC Australia was a standout performer and helped a net profit after tax of $32.9 million.

Shareholders will receive a fully franked final dividend of 12.5 cents per share. This is better than the previous fully franked final payout of 10.5 cents per share.

The company's shares on the ASX were down 5.67 per cent to $11.98.

In mining, BHP and Rio Tinto fell by more than half a per cent. Fortescue gained 0.39 per cent to $23.14.

The Australian dollar was buying 75.47 US cents at 1728 AEST, lower from 75.90 US cents at Monday's close.

ON THE ASX

* The benchmark S&P/ASX200 index closed lower by 6.1 points, or 0.08 per cent, to 7301.2 on Tuesday.

* The All Ordinaries closed down by seven points, or 0.09 per cent, to 7565.5.

* At 1728 AEST, the SPI200 futures index was up 10 points, or 0.14 per cent, to 7230.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 75.47 US cents, from 75.90 cents on Monday

* 83.51 Japanese yen, from 84.03 yen

* 63.37 Euro cents, from 63.62 cents

* 54.46 British pence, from 54.53 pence

* 107.60 NZ cents, from 107.24 cents.

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