ASX bounces back from morning sell-off

Australian stocks ended the session higher, bouncing back from falls at the open spurred on by short-selling jitters in wake of the GameStop saga.

The benchmark S&P/ASX 200 index jumped 55.6 points, or 0.8 per cent, to 6663 at the close, with nine of the 11 index sectors ending higher.

The broader All Ordinaries index rose 51.9 points, or 0.8 per cent, to 6922.8, while the Australian dollar was fetching 76.52 US cents and gold was buying $US1861.8 per ounce at the close of trading.

ThinkMarkets analyst Carl Caplingua said Monday’s gains were the biggest positive intraday reversal since March 13 before the big crash caused by the coronavirus pandemic.

“We closed over 2 per cent off the lows. That’s the best way to think about the magnitude of buying that occurred (on Monday),” he said.

“If you’re a big fund with a pile of cash to put into the markets, the best way to get the liquidity you need is to buy into an obvious down open.”

Axi market analyst Stephen Innes said investors were erring on the side of caution while vaccine issues and the flow-on effects of the GameStop debacle eroded market certainty.

“I think it’s still wise to remain cautious as risk sentiment is likely to spin like a top over the next 48 hours amid COVID-19 vaccine efficacy concerns, especially with the Reddit Red Raiders’ toxic flow on traders’ minds,” Mr Innes said in an investor note.

Blackmores was the biggest mover in the upward swing, surging 8.9 per cent at the close to $79.93 per share.

Worley led the market losses, slumping 10.9 per cent to $10.18 per share after it notified investors of a significant impact to earnings from COVID-19.

Major banks ended the day in positive territory with stock in Commonwealth Bank increasing 1.4 per cent to $84.68 per share, while shares in Westpac rose 0.4 per cent to $21.21 each.

ANZ was up 1.5 per cent to $24.06 per share and NAB jumped 1.5 per cent to $24.06 per share.

Shares in mining giant Rio Tinto closed 0.9 per cent higher to $111.27 each, while its major competitor BHP finished the trading day up 1.3 per cent to $44.12 per share.

Telstra’s share price gained 1.3 per cent to $3.16 each, while online retailer Kogan saw its share price plummet 3.9 per cent to $17.31 each.

Buy-now-pay-later giant Afterpay rose 0.6 per cent to $135.87 per share, while rival Zip soared 5 per cent to $7.65 per share.

Woolworths shares increased 1.1 per cent to $41.05 each and Wesfarmers rose 1.1 per cent to $55.22 per share.

Qantas inched 0.4 per cent higher to $4.52 per share, while Flight Centre tumbled 2.6 per cent to $13.71 per share.

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