ASX Trading Wrap: Travel stocks make a strong move higher

ASX Trading Wrap: Travel stocks make a strong move higher

The ASX 200 gained 0.8% this week to finish on 6,766.80 points as the Dow Jones and S&P 500 both hit record highs, and the tech-heavy Nasdaq also made strong ground. It came after US bond yields started to drop slightly as core inflation data fell short of expectations, easing concerns around the outlook for interest rates. 

 

Which shares excelled?

Hansen Technologies (ASX: HSN) was one of the standout names this week as the company provided a rosy trading update to its shareholders. Not only did the company announce a new 5-year $25 million deal with Telefonica to use its cloud product suite, but that also prompted management to upgrade the company’s guidance for FY21. With a share price gain of 33.7% for the week, the stock also hit a 52-week high.

Elsewhere, travel stocks were on the rise as the government committed $1.2 billion to support the sector. In subsidising flights and also providing employment assistance to the airlines, the government will be hoping states keep their borders open to reap the economic windfall of tourism, while the likes of Flight Centre (ASX: FLT), Webjet (ASX: WEB) and Corporate Travel Management (ASX: CTD) all rose as shareholders anticipate an uptick in consumer confidence to travel more broadly as a result.

Silver Lake Resources (ASX: SLR) and Ramelius Resources (ASX: RMS) were two of the primary beneficiaries of a modest increase in the USD price of gold across the week. The duo led the way with gains of 10.9% and 10.6% respectively as the price of the precious metal edged higher by about 1%, even as the Australian dollar effectively offset that rise.

Shares in telecoms business Vocus Group (ASX: VOC) leapt 9.9% after the company provided an update on the takeover bid it received from a consortium led by Macquarie Infrastructure and Real Assets (MIRA), and Aware Super. As part of the announcement, the company has accepted the offer and entered into a Scheme Implementation Deed with the consortium, with shares set to be acquired for $5.50 each, subject to final approvals.

Lithium miners also bounced back this week, with Piedmont Lithium (ASX: PLL) up around 17%, Orocobre (ASX: ORE) gaining 12.2%, and Pilbara Minerals (ASX: PLS) surging circa 6%. It comes after some heat was taken out of the sector amid the risk-off rotation out of high-growth stocks driven from rising bond yields in the US.

In other sectors, there were strong gains for the likes of Unibail-Rodamco-Westfield (ASX: URW), Bingo Industries (ASX: BIN), OZ Minerals (ASX: OZL), Mineral Resources (ASX: MIN), Nuix (ASX: NXL) and Pointsbet Holdings (ASX: PBH).

 

 

Which shares dragged on the market?

Given their size, the major iron ore miners dragged on the index at various times throughout the week, which came as China’s leading steel-producing province cut back iron ore demand in response to environmental controls following heavy pollution weather. Fortescue Metals (ASX: FMG) was hit hardest among the bunch, but still only shed 3.8% for the week, while BHP (ASX: BHP) and Rio Tinto (ASX: RIO) fared much better.

Tech names were also volatile this week, with Zip Co (ASX: Z1P) slumping 10.1%. Although there were many other names like Afterpay (ASX: APT) and Megaport (ASX: MP1) with steep losses during the week, they rebounded strongly off their lows to pare most of their losses.

Shares in A2 Milk (ASX: A2M) started to trend backwards after mounting a mini-recovery in the wake of the company’s poor earnings report late last month. Across the week, the A2M share price sank 5.8%. Its recovery has not been helped by news just over a week ago from major supplier Synlait (ASX: SM1), which slashed its own guidance amid A2 Milk’s uncertain outlook and global shipping delays in the industry. 

Last but not least, Lendlease (ASX: LLC) rounds out the worst-performing mid-to-large-cap stocks for the week. Earlier in the week, CEO Stephen McCann disposed of 375,000 securities on-market to fund income tax obligations and debt reduction, which may have prompted some shareholders to also reassess their holdings.

 

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

 

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