The share market sealed back-to-back weekly gains with a fourth straight advance after strong economic data and a pause in energy prices lifted Wall Street.
The S&P/ASX 200 climbed 19 points or 0.26 per cent. The rally lifted the benchmark above 7400 for the first time since mid-January and extended its tally for the week to 112 points or 1.5 per cent.
The mining sector led, as it has for most of the week as commodity prices pushed back towards this month’s highs. Healthcare companies, tech stocks and some of the banks declined.
What moved the market
The market has left this month’s Ukraine war lows far behind in anticipation of the economic boost from higher export prices. The ASX 200 has put on more than 6 per cent in two and a half weeks.
Unsurprisingly, the materials sector has set the pace, rising 1.3 per cent this afternoon to its seventh gain in eight sessions.
Commodity gains have also fed a strong rally in the dollar. The Aussie was hovering near a four-month high this afternoon above 75 US cents.
Today’s rally brought the ASX 200 back to within 3 per cent of this year’s peak. The market topped out at 7620 in the first week of January, a few points short of last year’s all-time high. Since then, the market has climbed a “wall of worry” that includes rising inflation, a war in Ukraine, rate increases in the US and the prospect of higher rates here in the next few months.
Today’s advance followed gains on Wall Street as energy prices backed off a two-week high, and a 53-year low in benefits claims underlined the strength of the US economy. The S&P 500 rallied 1.43 per cent. The Dow put on 1.02 per cent and the Nasdaq Composite 1.93 per cent.
Energy prices retreated overnight as Western leaders met for the first of a series of meetings across the next few days. Brent crude reversed 2.1 per cent.
“Oil prices took a breather after the gathering of NATO leaders did not result in any new oil sanctions against Russia,” Kalkine Group CEO Kunal Sawhney said.
“Energy prices are expected to remain volatile for quite some time till Russia and Ukraine reach a negotiated settlement. The commodity market is eyeing broader uncertainty around supply dynamics due to the Russia-Ukraine war. Meanwhile, the fluctuation in energy prices is fuelling concerns around inflationary pressures and their impact on central banks’ monetary policy,” he added.
Winners’ circle
BHP climbed 0.95 per cent back towards a seven-month high. Fortescue Metals added 1.74 per cent and Rio Tinto 0.74 per cent. A two-week peak in gold lifted Newcrest 3.46 per cent.
AVZ Minerals climbed 3.17 per cent to a fourth straight record during another strong session for lithium miners. Pilbara Minerals put on 3.22 per cent, Allkem 3.48 per cent and Liontown 2.67 per cent.
Nickel miner IGO gained 3.48 per cent after nickel traded limit up for a second straight night in London. Mineral sands miner Iluka advanced 2.79 per cent.
Macquarie Group was the pick of the financial heavyweights with a rise of 0.65 per cent.
JB Hi-Fi rallied 3.55 per cent a day after releasing strong retail sales data. Brickworks gained 4.81 per cent after yesterday’s well-received half-year result. BlueScope Steel climbed 5.09 per cent.
Doghouse
Premier Investments eased 1.59 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 1.17 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 0.89 per cent. CSL dipped 0.97 per cent.
Telix Pharmaceuticals slumped 11.18 per cent after breaking a key technical support zone.
Other markets
A subdued session on Asian markets saw the Asia Dow drop 0.12 per cent, China’s Shanghai Composite 0.47 per cent, Hong Kong’s Hang Seng 1.62 per cent and Japan’s Nikkei 0.03 per cent.
S&P 500 futures reversed to a gain of seven points or 0.14 per cent.
Oil pared overnight losses. Brent crude gained 19 US cents or 0.16 per cent at US$119.22 a barrel.
Gold slid US$1.40 or 0.07 per cent to US$1,960.80 an ounce.
The dollar inched up 0.17 per cent to 75.23 US cents.
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