A rebound on Wall Street helped propel the ASX towards a fourth straight gain as a two-week mining rally rolled on.
The S&P/ASX 200 climbed 38 points or 0.52 per cent by mid-session. The rally lifted the benchmark above 7400 for the first time in nine weeks.
Newcrest, BHP and Fortescue Metals did much of the heavy lifting, with support from Macquarie Group. CSL and most of the high-street banks declined.
What’s driving the market
A seesaw week on Wall Street took an upward tilt overnight. The S&P 500 rallied 1.43 per cent as energy prices backed off a two-week high, and a 53-year low in benefits claims underlined the strength of the economy. The rally put the S&P 500 and Nasdaq on track for a second winning week despite a string of daily reversals.
“US stocks rallied overnight as investors kept a close eye on the meeting of NATO leaders to respond to the Russia-Ukraine war. Investors cheered the unified approach of Western leaders against the war and the new sanctions imposed by the US on Russian lawmakers and defence contractors,” Kunal Sawhney, chief executive of research group Kalkine, said.
“Labour market data impressed the market to the upside, reflecting a decline in last week’s initial jobless claims to the lowest since September 1969…Oil prices took a breather after the gathering of NATO leaders did not result in any new oil sanctions against Russia,” he added
Australian investors have enjoyed an easier ride than their American cousins this week, thanks to a strong recovery in commodity prices. Overnight, nickel traded limit up for a second session. Iron ore held near a seven-month high.
The ASX basic materials sector has risen for seven of the last eight sessions. The sector climbed 1.4 per cent this morning to a three-week high.
Commodity gains have fed a strong rally in the dollar in anticipation of the economic boost from higher prices. The Aussie was hovering near a four-month high this morning just above 75 US cents.
Going up
BHP climbed 1.12 per cent back towards a seven-month high. Fortescue Metals added 1.66 per cent and Rio Tinto 1.03 per cent. A two-week peak in gold lifted Newcrest 2.73 per cent.
AVZ Minerals climbed 4.52 per cent to a fourth straight record during another strong session for lithium miners. Pilbara Minerals put on 3.86 per cent, Allkem 3.85 per cent and Liontown 2.67 per cent.
Nickel miner IGO gained 3.4 per cent after nickel traded limit up for a second straight night in London. Mineral sands miner Iluka advanced 3.72 per cent.
Macquarie Group was the pick of the financial heavyweights with a rise of 0.97 per cent.
JB Hi-Fi rallied 3.65 per cent a day after releasing strong retail sales data.
Going down
Premier Investments eased 1.11 per cent as a record interim dividend payment helped soothe news of a 13 per cent fall in first-half profit. Net profit fell to $163.6 million with many stores affected by Covid lockdowns.
The retail group said the second half “opened strongly”. Global sales increased 6.2 per cent across the first five weeks compared to the prior corresponding period. Shareholders will receive 46 cents per share for the half, an increase of 35.3 per cent on 1H21.
Healius dipped 0.94 per cent after selling its Adora Fertility business for two-thirds of a previous offer price. Private-equity firm Liverpool Partners will acquire the business for $30.5 million. A previous deal to sell the business to Virtus Health for $45 million was thwarted by competition concerns.
A broker downgrade from Morgans helped pull toll road operator Atlas Arteria down 1.56 per cent. CSL dipped 0.62 per cent.
Telix Pharmaceuticals slumped 13.92 per cent after breaking a key technical support zone.
Other markets
A subdued morning on Asian markets saw the Asia Dow add 0.14 per cent, while China’s Shanghai Composite shed 0.01 per cent, Hong Kong’s Hang Seng 0.5 per cent and Japan’s Nikkei 0.17 per cent.
S&P 500 futures retreated four points or 0.1 per cent.
Oil added to overnight losses. Brent crude eased 23 US cents or 0.2 per cent to US$118.80 a barrel.
Gold firmed 60 US cents or 0.03 per cent to US$1,962.80 an ounce.
The dollar inched up 0.06 per cent to 75.15 US cents.
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