Australian shares have risen, with tech stocks including Afterpay surging, after a rally in the US overnight saw the Nasdaq hit a fresh record.
- The Australian share market opened higher, led by mining and energy stocks
- Treasury Wine Estates was among the worst performers, as it warned earnings had taken a hit
- Overnight, the UK Government announced extra stimulus measures
By 1:15pm AEST, the benchmark ASX 200 index had gained 0.9 per cent, or 55 points, to 5,975.
Mining and energy stocks led the broad-based rally, with shares in BHP (+2.1pc), Rio Tinto (+3.2pc), Woodside (+3.3pc) and Worley (+4.1pc) making gains.
Rio Tinto said more than 2,000 jobs would go in New Zealand, as it announced plans to close its aluminium smelter in the country because of high power prices.
The big miner said the winding down of operations at the New Zealand smelters would end in August next year, before eventual closure.
The smelter employs around 1,000 people, with a further 1,600 indirect jobs affected.
Technology stocks surged, led by buy-now-pay-later operators Afterpay (10.5pc) and Zip Co (+7.5pc).
Afterpay shares hit a fresh record high above $73 following an upgrade from Morgan Stanley.
Morgan Stanley analysts raised their price target on the stock to $101, saying the company’s latest earnings were much stronger than expected.
Shares in Treasury Wine Estates had fallen 1.1 per cent to $11.15, after another profit warning from the winemaker.
Treasury Wine said its core earnings for the 2020 financial year had fallen by 21 per cent, compared to the prior year, amid the coronavirus pandemic and travel restrictions.
The company now expects earnings to come in between $530 million and $540 million, with a decline of 14 per cent in Asia, 37 per cent in the Americas and 16 per cent in Australia and New Zealand.
Due to the uncertainty caused by the pandemic, Treasury did not provide guidance for the 2021 financial year.
The Australian dollar was slightly weaker against the greenback, buying around 69.7 US cents.
Multi-billion pound stimulus announced in UK
The UK government has unveiled a multi-billion-dollar plan to help young people find jobs as part of a 54 billion pound mini-budget to counter the economic shock from the coronavirus pandemic.
It announced a 2 billion pound ($3.6 billion) employment program and additional money for investment in training and apprenticeship schemes.
UK Chancellor of the Exchequer Rishi Sunak said the plan will help young people aged between 16 and 24 on social security payments to find a six-month job placement.
He also announced a short-term cut in sales tax for hospitality and tourism and an August “eat out to help out” discount scheme with the Government trying to encourage people to leave their homes and spend money.
There was also an immediate cut in stamp duty on house purchases of up to £500,000, which will stay in place until the end of March next year and a 2 billion pound grant for “green homes”.
Shares in major UK construction firms jumped.
Overall, the FTSE 100 came off its early lows and gained slightly as Mr Sunak announced the mini-budget, although it ended down 0.5 per cent at 6,156 points in a volatile session.
Tech shares rally on
In the US, stocks rose and the Nasdaq hit a record closing high as technology shares rallied amid signs of an economic rebound offsetting concerns about further coronavirus lockdowns.
Apple hit a new record high and Microsoft provided the biggest boost to the S&P 500.
The Dow Jones Industrial Average rose 0.7 per cent to 26,067, the S&P 500 gained 0.8 per cent to 3,169 and the Nasdaq Composite added 1.4 per cent to 10,493.
Biogen jumped after the company said it submitted the marketing application for its experimental Alzheimer’s disease therapy.
The market surge came despite the number of confirmed coronavirus cases in the US surpassing three million, affecting nearly one out of every 100 Americans.
California, Hawaii, Idaho, Missouri, Montana, Oklahoma and Texas broke their previous daily record highs for new infections.
Spot gold continued to climb above $US1,800 amid rising coronavirus cases globally.
It rose to $US1,809 an ounce.
Oil prices also made small gains, with Brent crude oil up 0.7 per cent to $US43.37 a barrel.