ASX follows Wall St higher, Treasury Wine shares fall on COVID-19 hit

Australian shares have risen in early trade after a rally in tech stocks led the Nasdaq to a fresh record in the US overnight.

Key points:

  • 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 10:40am AEST, the benchmark ASX 200 index had gained 0.9 per cent, or 50 points, to 5,970.

    Mining and energy stocks led the broad-based rally, with shares in BHP +(2pc), Rio Tinto (+2.6pc), Oil Search (+2pc) and Worley (+2.6pc) 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.

    Shares in Treasury Wine Estates had fallen 3.3 per cent to $10.91, 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 higher against the greenback, buying around 69.9 US cents.

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