Australian shares closed higher on Wednesday after a positive lead from the US technology sector set up local growth companies for a strong session.
The S&P/ASX 200 Index added 61.3 points, or 1 per cent, to close at 5956.1 after the S&P/ASX All Technology Index added 3 per cent in the session.
The Nasdaq Composite index closed 1.2 per cent higher in New York overnight despite the Dow Jones Industrial Average ending flat as the technology sector further recovers from the sell-off at the start of the month.
Lennox Capital Partners portfolio manager Liam Donohue says the outlook for technology and growth companies is positive despite the ongoing risk of volatility in the current environment.
“I wouldn’t say that that period of weakness is over, because it will probably reoccur at times over the next few months, as it does in any market,” Mr Donohue said.
“But I think the view that growth continues to outperform value is probably widely held view and as a result the market will probably continue to move in that direction over time.”
Company news added to the offshore sharemarket momentum in local trade. A performance update from Kogan.com provided further evidence of the structural growth in e-commerce.
Shares in the company rose 6.1 per cent to $20.41 after the pure-play online retailer said it added 152,000 new active customer accounts in August, which topped the previous record growth in the April national lockdown.
Seek shares jumped 9.4 per cent to $21.02 as the online jobs classified company confirmed its Chinese subsidiary, Zhaopin, was “holding discussions with a number of parties” after news reports that it was in talks with technology giant Alibaba to bring in new investment.
Buy now pay later was also in favour: Afterpay shares added 4 per cent to close at $78.03; Sezzle shares gained 9 per cent to end the session at $7.26; and Zip Co rose 6.1 per cent to $6.44.
In financial services, a trading update from Bell Financial pushed its shares 7.9 per cent higher to $1.225. The capital markets firm is projecting 32 per cent pre-tax profit growth for the year ending September 30.
Shares in QBE slipped 0.9 per cent to $9.20 after a UK court found against the insurer in a dispute over the liability to businesses that claimed coronavirus-related losses under “business interruption” clauses.
The airline industry was back in focus following Qantas’s announcement this week that it is reviewing its tenancies and operational locations. Alliance Aviation shares rose 5.7 per cent to $3.70 after saying at its annual general meeting that its outlook was positive, in line with its consensus forecast. Financial 2021 is expected to deliver growth in contract and charter revenue from its traditional client base.
Shares in competitor Regional Express also advanced, rising 3.8 per cent to $1.085.
Flight Centre confirmed further job losses were needed after managing director James Kavanagh warned previous hopes of a quick recovery had eroded. Its shares rose 1.8 per cent to close at $13.30.
Shares in Boral gained 2.9 per cent to $4.24 as it became evident there has been further shareholder lobbying, urging management to sell off its ailing US assets.
In real estate, Scentre Group confirmed it was looking at a substantial capital raising after The Australian Financial Review reported it was set to go to the market for $US2 billion ($2.7 billion). Securities in the real estate investment trust added 2.7 per cent to close at $2.72.
Tabcorp announced the end of a $600 million capital raising after 71 million new shares were sold at $3.25 each under the retail component. The gambling company’s shares edged up 0.3 per cent to $3.42.
After federal government announcements this week left investors unmoved, higher crude oil prices helped lift energy sector shares as a hurricane disrupted US producers. Karoon Energy added 3.3 per cent to close at 79¢, Santos shares closed 1.8 per cent higher at $5.18, and Viva Energy rose 1.9 per cent to $1.615.
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