Cannabis stocks rally on UN decision to reclassify: Aus shares 0.3% higher at noon

The Australian share market opened slightly lower despite positive leads from Wall Street, but quickly changed direction and has gained 0.3 per cent over the morning. Almost all of the sectors are up this morning, with Financials leading the charge. Australian medical cannabis stocks are trading higher at the end of the week, after the United s Nations reclassified cannabis as a less dangerous drug yesterday. Cannabis is now considered a Schedule I drug– that’s the least restrictive drug classification.

The S&P/ASX 200 index is 18 points up or 0.3 per cent higher at 6,633. On the futures market the SPI is 10 points higher.

Local economic news

The Australian Bureau of Statistics reports that retail trade rose 1.4 per cent month on month in October, falling just short of the 1.6 per cent rise the market was expecting. It’s up 7.1 per cent compared to October of last year.

Broker moves

Citi rated Harvey Norman Holdings (ASX:HVN) as a Buy, upgrading its price target to $5.50. Covid has been a tremendous earnings growth driver for housing-related retailers in 2020. The broker expects the net effect of the pandemic to be a prolonged period of elevated earnings for housing-exposed retailers like Harvey Norman. Citi expects the housing cycle to be a key tailwind for Harvey’s over the next three years. Shares in Harvey Norman Holdings (ASX:HVN) are trading almost 1 per cent lower at $4.69.

Company news

Cannabis stocks have rallied on news the UN Commission on Narcotic Drugs has voted to remove cannabis from a category of the world’s most dangerous drugs. The commission, which is the governing body of the UN Office on Drugs and Crime, voted by 27 to 25 to remove cannabis and cannabis resin from Schedule IV of the 1961 Single Convention on Narcotic Drugs. Australian based pharmaceutical company AusCann Group (ASX:AC8) CEO Nick Woolf says “the change in scheduling has the potential to vitalise research into medicinal cannabis. It will assist in global research into clinically-relevant cannabinoid-based medicines to address unmet medical needs”. Aussie company Roots Sustainable Agriculture Technologies (ASX:ROO) specialises in plant physiology for increased growth, productivity and quality. It says it expects a “significant ramp up in industry activity”. Its CEO and Chairman, Boaz Wachtel said: “the UN ruling to declassify cannabis is a landmark decision and paves the way for the relaxing of cannabis drug classifications in large markets across the world”. Cannabis centric healthcare company Bod Australia (ASX:BDA) also weighed in agreeing that the decision could “act as a catalyst for countries to legalise the drug for medical use, as well as reconsider laws on recreational use”.

Shares in AusCann Group (ASX:AC8) are flat at $0.17.
Shares in Roots Sustainable Agriculture Technologies (ASX:ROO) are 21.7 per cent higher at $0.03.
Shares in Bod Australia (ASX:BDA) are 7.4 per cent higher at $0.66.

Best and worst performers

The best-performing sector is Financials, adding 0.9 per cent, while the worst performing sector is Health Care, shedding 0.4 per cent.

The best performing stock in the S&P/ASX 200 is Janus Henderson (ASX:JHG), rising 6.9 per cent to $41.90, followed by shares in Polynovo (ASX:PNV) and Monadelphous (ASX:MND).

The worst performing stock in the S&P/ASX 200 is Regis Resources (ASX:RRL),dropping 5.2 per cent to $3.73, followed by shares in Ansell (ASX:ANN) and Omni Bridgeway (ASX:OBL).

Commodities and the dollar

Gold is trading at US$1,840 an ounce.
Iron ore price rose 0.6 per cent to US$137.08.
Iron ore futures are pointing to a rise of 1.2 per cent.
One Australian dollar is buying 74.40 US cents.

Source: Finance News Network