After reporting record revenues and customer numbers in its half-year profit update, Xero shares led all gainers on the benchmark index, jumping 9.6 per cent to close at $73.95.
The other so-called “WAAAX” stocks – Wisetech Global, Appen, Altium and Afterpay Touch – also enjoyed a strong day, lifting between 0.2 to 3.4 per cent. The lift in Afterpay shares came despite UBS adding its sell call on the buy now, pay later operator to its key conviction list.
Consumer staples also enjoyed a stellar day, with a gain of 2.2 per cent. The supermarkets were all in high demand, with Woolworths, Coles Group and Metcash all gaining more than 2.2 per cent, the latter the standout performer with a lift of 5 per cent to $2.95.
Consumer discretionary was also well supported, logging an increase of 1.4 per cent despite Flight Centre shares experiencing turbulence after a downbeat trading update. Shares in the travel retailer slumped 5.5 per cent to $40.07. That weakness was more than offset by gains elsewhere, with Harvey Norman climbing 2.2 per cent to $4.20 and JB HiFi jumping 2.7 per cent to $36.73.
Elsewhere, utilities, communications, healthcare, gold miners and financials all posted gains of more than 1 per cent, the latter helped by a 2.2 per cent bounce in National Australia Bank shares, which closed at $28.42 following the release of its full-year results.
Buying was also seen in the other major banks, with the Commonwealth, ANZ and Westpac lifting between 0.4 per cent and 1.3 per cent.
“Consensus earnings remain elevated, and we expect to see earnings downgrades across the market,” Macquarie Bank analysts Victor German and Josh Freiman told clients in response to the overall outlook for the major banks.
Putting the day’s price action into perspective, industrials, materials and REITs were the relative laggards, closing with gains of between 0.7 per cent and 0.9 per cent.
Energy was the only sector to weaken on Thursday, finishing down 0.7 per cent having slumped more than 1 per cent at the open.
In economic news released during session, Australia’s trade surplus rose unexpectedly to $7.18 billion in September, well ahead of economist forecasts for a decline to $5.1 billion. Importantly, international trade looks set to make a flat to slight contribution to economic growth in Australia’s September quarter GDP report, reversing earlier expectations of a modest drag.
Despite the big trade beat and positive news for economic growth, the Australian dollar and bond yields eased lower on Thursday. In late Asian trade, the local dollar was buying US68.69¢ down 0.2 per cent from where it closed on Wednesday. Benchmark 10-year bond yields slipped 6 basis points to 1.215 per cent.
David Scutt covers markets for The Sydney Morning Herald and The Age