Vaccine hopes cause ASX 200 to rise on Tuesday

The S&P/ASX 200 Index (ASX:XJO) rose on Tuesday on hopes that a COVID-19 vaccine may be getting closer for Australia (and the US).

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The S&P/ASX 200 Index (ASX: XJO) rose by 0.6% today to 6,340 points.

There was one very major piece of news over the past 24 hours:

COVID-19 vaccine news

Global news media is reporting that a vaccine being produced by Pfizer could be 90% effective at stopping COVID-19. Around 44,000 people had been given a trial of the vaccine, and the results are promising when looking at the 94 people who have been infected by COVID-19, according to early results.

This vaccine is actually one of the ones that Australia has signed an agreement about. Federal Health Minister Greg Hunt said: “The data on our vaccine candidates continues to be positive. We will examine the evidence carefully but the latest results are heartening news.”

There are still several steps to bring the vaccine to public, but Pfizer hopes to start production of the vaccine as soon as it can.

Various sectors react

There were some big movements in the ASX 200 as investors tried to decide what this meant for different industries and different businesses.

As you may have guessed, travel businesses went up significantly in response. The Qantas Airways Limited (ASX: QAN) share price went up around 8%, the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price grew by around 10%, the Webjet Limited (ASX: WEB) share price went up 13.5% and the Flight Centre Travel Group Ltd (ASX: FLT) share price rose by around 9%.

The oil sector also had a really strong performance. The Woodside Petroleum Limited (ASX: WPL) share price went up around 7.25%, the Oil Search Limited (ASX: OSH) share price soared up by 16.5%, the Santos Ltd (ASX: STO) share price went up 12.2% and the Beach Energy Ltd (ASX: BPT) share price rose 14.8%.

ASX 200 bank shares also went up a lot today. The National Australia Bank Ltd. (ASX: NAB) share price rose 7.6%, the Westpac Banking Corp (ASX: WBC) share price went up 5.2% and the Australia and New Zealand Banking Grp Ltd (ASX: WBC) share price rose 5% as well.

Shopping centre businesses also saw big increases in their share prices. The Unibail-Rodamco-Westfield (ASX: URW) share price went up 43.5% and the Scentre Group (ASX: SCG) share price rose 14.5%.

Incitec Pivot Ltd (ASX: IPL)

Incitec Pivot reported its FY20 result to the market today. The Incitec share price fell by around 2.8% in response.

The company said that it generated $123 million of statutory net profit after tax, including $65 million of material items relating to writedowns and COVID-19 effects.

Excluding those material items, net profit went up by 23% to $152.4 million and underlying earnings per share (EPS) went up by 15% to 10.9 cents.

Earnings before interest and tax (EBIT) excluding material items rose by 23% to $374.5 million.

In terms of its segments, Dyno Nobel Americas reported that EBIT fell 1% on last year to $230.8 million. Volumes in the explosives business were impacted by structural declines in the coal market as well as temporary COVID-19 restrictions at some customer mining operations.

Meanwhile, Dyno Noble Asia Pacific delivered EBIT of $149.3 million (down 17%). While volumes in the Australian business held up well, according to management, earnings were impacted by the previously announced re-contracting of Moranbah foundation customers, as well as lower earnings from Indonesia.

The company finished with net debt down to $1.03 billion (down from $1.69 billion), largely thanks to the capital raising of $646 million as well as cash generation.

The board of Incitec decided not to pay a dividend because of the COVID-19 uncertainty and the equity raising earlier in the year.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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