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Precise Investors

Thursday, August 5, 2021
Stocks & Shares

Australian shares rise despite volatile oil prices

Australian shares

The ASX 200 index closed 0.9 per cent higher at 7,327 points, with technology and healthcare being the strongest performers

Australian shares have bucked the trend by closing sharply higher, despite volatile oil prices and losses across Wall Street, European and Asian markets.

Chinese tech firms listed overseas were also hit hard as Beijing continued to crack down on ride-hailing giant Didi.

The ASX 200 index closed 0.9 per cent higher at 7,327 points, with technology and healthcare being the strongest sectors.

Solid gains were posted by Pro Medicus (+4.1pc), Cochlear (+4.3pc), Zip Co (+6.5pc), Afterpay (+4.6pc), A2 Milk (+6pc) and Pointsbet (+4.8pc).

Challenger (Australia’s biggest provider of annuities) was the best performing stock, which climbed 8.8 per cent.

This was after it revealed two US companies — retirement services provider Athene Holding and private equity firm Apollo Global Management — bought a major stake in Challenger’s business.

All up, they purchased 18 per cent of the Australian company’s shares for $720 million.

Energy companies suffered heavy falls, including Whitehaven Coal (-3.8pc), Worley (-3pc), Oil Search (-2.5pc), Ampol (-2.4pc) and Beach Energy (-2.3pc). Those stocks were some of yesterday’s top performers.

The Australian dollar recovered some of its losses, and traded above 75 US cents by 4:25pm AEST.

It reached 76 US cents overnight, and dropped to 74.84 cents during the day, essentially wiping out all its gains since the Reserve Bank’s stimulus announcement on Tuesday.

The Reserve Bank of Australia (RBA) has been purchasing $5 billion worth of government bonds each week to pump more stimulus money into the economy. But from September to November, that amount will be rolled back to $4 billion a week.

Despite yesterday’s taper announcement by the RBA, it still remains as one of the more dovish central banks under our coverage, said Commonwealth Bank economist Kim Mundy.

That was in contrast to the RBA’s insistence it will not hike rates before 2024.

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