As it happened: ASX gains 0.4% as healthcare, industrials and IT lead

He noted that Australia’s hospital system was not under the same stresses as UK and US. Here, hospitalisations were running at 35 COVID patients per million people, compared to 287 in the UK and 102 in the UK. However, NSW’s hospital system was concerning with 80 per cent of intensive care beds currently occupied.

While the COVID hit has not been that bad, the economic damage is mounting, he said.

The problem is that governments were focused on widespread vaccination before they reopen, “which could take another couple of months at least”.

“And some states seem reluctant to budge from a quasi-elimination goal,” Mr Baker wrote, obviously referencing Victoria.

More bad news is that an 80 per cent vaccination rate may not be possible given vaccine hesitancy is running at 20 per cent. The goal would require every single non-hesistant person to get the jab.

The iron ore miners were weak, with BHP, Rio Tinto and Fortescue Metals all hitting reverse, while energy companies and gold prospectors were also down.

The final session of the earnings season continued a theme familiar to shareholders throughout the month: improved profit, strong balance sheets, and big shareholder returns, but tinged with a murky outlook as the pandemic threatens supply chains and economic growth.

JP Morgan global market strategist Kerry Craig said the guidance certainly softened at the tail end of earnings season, leading many analysts to fear for the worst.

“It does create upside potential for when we do get that guidance,” Mr Craig said.

“There’s still a feeling of caution towards equities at the moment, we’re very wary of the valuations and we’re wary of perhaps that the market is higher than where it should be given the economy warrants right now.“

“But then markets are forward-looking and good at looking past near-term weakness.“

Tuesday’s wild earnings reactions included a 15.9 per cent drop for stem cell research firm Mesoblast, while Harvey Norman and Regis Resources also sold off.

Investors appeared generally pleased with what they saw from miner IGO - which rose 1.4 per cent to $9.65 - and online gambling firm PointsBet - which finished 1.7 per cent ahead at 10.38.

CSL gained 0.5 per cent to $3.11 and touched its highest price in nine months at $315.18. ResMed rose 3.3 per cent to $40.19, not far off the record high set last week.

The ASX 200 rose 1.9 per cent for the month and has now advanced in 16 of the past 17 months since it tumbled in the March 2020 crash.

The index hit a record high 7532.8 in mid-August and remains within 100 points of that landmark even as the Delta variant forces border closures and lockdown of major cities and drives general uncertainty over when things will return to normal.

The market’s resilience is perhaps even more remarkable given the mounting concerns over economic growth and looming supply chain chaos, as well as a decidedly mixed outlook for listed entities.

Mr Craig says these concerns over the pandemic and growth outlook should also ensure central banks will continue their monetary support for some time yet.

“You’ve just come of the back of a really good earnings season, despite some misses, with a lot of profit and dividends being paid back into the market,” he said.

“That’s been very supportive, and now we’re following the lead set in the US, where it is about central banks showing that they’re not in any hurry to take away the liquidity they’ve been providing to the market or raise interest rates for some time. This basically reaffirms the values we’re seeing.”

Weak manufacturing numbers in China provided further evidence of an economic lag as the world fights to keep a lid on the coronavirus.

Mr Craig said the immediate challenges for economies were undeniable - and fears over the peaking of growth and earnings not without merit.

That said, he believes the market still views the situation as more of a “temporary slowdown”, with hopes pinned on a strong reopening trade.

“I don’t think markets are shrugging off these concerns, but I do think they can see light at the end of the tunnel and that view around the monetary policy side of things has been quite supportive of markets, and equities in particular,” Mr Craig said.

They predicted profits and improved revenues once lockdowns start to east. They expect this will start in November and lockdowns will be fully lifted by 1 December, 2021.

Olivers is currently talking to PURE Asset Management and major shareholders for potential funding. In recent weeks it received an unsecured $500,000 loan from two major shareholders at 4 per cent interest, repayable on 30 September.

Shares closed at 5.9¢ with the company’s market capitalisation currently at around $18.3 million.

“The airline industry has never been as badly ravaged in its entire history as today,” said Rex’s executive chairman Lim Kim Hai.

“In these circumstances, Rex has performed relatively well in a full year of operations under the pandemic. I am pleased that we have even managed to improve on our performance over the prior year which was only affected by COVID for a third of the year.”

Lim said the rest of 2021 would be dominated by rolling lockdowns and border closures, and it was possible that the first half of next year would be hit by further waves of infection.

“As such the outlook for the year is highly uncertain,” he said.

Rex did not declare a dividend or provide an outlook.

The company boldly launched capital city jet services earlier this year competing directly with Qantas and Virgin, backed with a $150 million funding deal with PAG Asian Capital.

At 3.30pm Rex’s shares were 2 per cent higher at $1.20. The stock has fallen from $2.09 at the start of January.

Boss Silviu Itescu told analysts on a call this morning that the business was having productive conversations with the regulator.

“We have just had an excellent meeting with the FDA, [a] very collegial and very positive meeting which has delineated exactly where we’re going,” he said.

The Melbourne biotech looks set to run another trial of its coronavirus treatment before attempting to gain emergency use authorisation, though the details have not yet been worked out.

The escalation of restrictions on gaming adds to the pain for investors in the region’s biggest technology companies, who’ve been hit by new rules from Beijing on everything from ride-hailing platforms to e-commerce to data security. The latest move has also halted a spurt of bargain hunting that had helped the sector claw back some of its losses over the past week.

Bilibili declined as much as 7.2 per cent while NetEase slipped 4.6 per cent. Kanterman noted that Bilibili’s customer base is skewed a bit more toward youth than that of NetEase.

Shares of food delivery giant Meituan were also swept up in Tuesday’s rout, dropping as much as 2.1 per cent as concerns over renewed regulatory crackdowns outweighed the company’s strong second-quarter revenue beat.

The new rules will only allow gaming platforms to offer services to minors from 8pm to 9pm on Fridays, weekends and public holidays, according to state news agency Xinhua, which cited a release by the National Press and Publication Administration.

China had previously restricted gaming hours for teens to 1.5 hours per day in 2019.

In Tokyo, Nexon Co. and Koei Tecmo Holdings Co. led Japanese video game makers lower. Nexon fell as much as 5 per cent while Koei Tecmo dropped as much as 4.4 per cent. Nexon received about of its 28 per cent of its revenue from China in the last fiscal year.

Chinese gaming stocks listed in the US had come under pressure on the news on Monday, with NetEase, Tencent Holdings, Bilibili and Huya ADRs all falling at least 1.1 per cent

The Nasdaq Golden Dragon China Index - which tracks 98 firms listed in the US that conduct a majority of their business in China - still managed to gain 0.7 per cent after earlier falling as much as 2.5 per cent.

Bloomberg