ASX Trading Wrap: Energy shares surge higher, while travel stocks bounce on vaccine hopes

ASX Trading Wrap: Energy shares surge higher, while travel stocks bounce on vaccine hopes

Despite a sluggish end to the week, the ASX ended above last Friday’s close, at one stage looking as though the benchmark index might test 6,500 points.

The US election outcome, as well as upbeat spirits around the prospect of a COVID vaccine helped underpin the initial rally, which petered out as the week went on. At Friday’s close, the ASX 200 finished on 6,405.2 points, up 3.5%.

 

Which shares excelled?

Closing the week on a high, Lovisa Holdings (ASX: LOV) had a bumper week, surging 46.6%. On Friday the company announced that it would acquire the European retail store network of German wholesaler ‘beeline GmbH’, expanding its store network by over 80 stores across Europe. Management cited that the deal will help the company expand its reach as part of its global rollout strategy.

Unibail-Rodamco-Westfield (ASX: URW) spurred to life in the wake of vaccine hopes, but there was also a lift following news that the company’s plans to conduct a heavily-dilutive capital raise had been scuppered by a group of activist-led shareholders. The group argue that the key to managing the company’s debt is through the sale of its US shopping centre assets. Shares in URW ended the week 31.2% higher.

Energy stocks charged ahead this week, with the price of oil initially rallying on the back of news surrounding the vaccine being tested by Pfizer and BioNTech. Faring best were Oil Search (ASX: OSH), Beach Energy (ASX: BPT) and Santos (ASX: STO).

Unsurprisingly, travel stocks were also given a shot in the arm following the vaccine study announcement, including Webjet (ASX: WEB) and Sydney Airport (ASX: SYD), which led the way climbing 17.9% and 13.3% respectively. With news flowing through that more state borders look set to open in the coming weeks, there was also positive momentum on the back of optimism regarding the domestic travel landscape.

Similarly, one week after their positive trading updates, Vicinity Centres (ASX: VCX) and Scentre Group (ASX: SCG) got a lift out of high hopes that the prospect of an effective vaccine could encourage consumers to return to brick and mortar shops in the medium-term.

Having recently hit a 52-week low, Telstra (ASX: TLS) shares rebounded on the strength of the broader market, but were also aided by news of the company’s strategic pivot. The telecommunications giant announced a major corporate restructure that will see it split into three separate businesses, mooted as the biggest change to the company since its privatisation. Telstra shares gained 11.8% throughout the week.

Elsewhere, there were strong performances from Fletcher Building (ASX: FBU), Lendlease Group (ASX: LLC), and Virgin Money UK (ASX: VUK).

 

 

Which shares dragged on the market?

There was heightened volatility and selling pressure in tech stocks, which also extended into the e-commerce territory, impacting market darling Temple & Webster (ASX: TPW). The online retailer struggled to find support, shedding 14.8%. It came as investors ditched the stock on the notion that an effective vaccine could slow the company’s growth trajectory given an increasing number of shoppers may be willing to return to brick and mortar shops.

Nonetheless, despite running its own physical stores, shares in Super Retail Group (ASX: SUL) were sold off as well. With the online component of its business proving to be a growth driver in recent months, concerns may now be creeping in as to whether this momentum can keep up.

Gold stocks took a pummelling this week, even though they rallied strongly on Friday. With the price of gold falling as much as US$100/oz at one stage, worst hit were the likes of Ramelius Resources (ASX: RMS), Silver Lake Resources (ASX: SLR), Northern Star Resources (ASX: NST) and Saracen Mineral Holdings (ASX: SAR).

As a shift from tech stocks to ‘recovery’ stocks took place, there was also an impact on IT-oriented stocks like Codan (ASX: CDA), NextDC (ASX: NXT) and Pushpay Holdings (ASX: PPH). Each of these were subject to notable selling this week as investors rotated into the likes of travel stocks, energy shares and REITs.

 

We’ll be back next week with another Weekly ASX Trading Wrap Up – until then, have a great weekend!

 

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