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The All Ordinaries index closed within ten points of an all-time high as the post-pandemic share market repair job neared completion.

The index rallied 50 points or 0.69 per cent to 7280.6, a mere 9.1 points short of the February 2020 record. The S&P/ASX 200 climbed 46 points or 0.66 per cent to 7023.1, some 174 points from last year’s peak.  

Gold and tech stocks set the pace. Newcrest and Afterpay were the best of the heavyweights. Support came from CSL, Rio Tinto, BHP and CBA. Telstra, Fortescue and Woodside capped the advance.

What moved the market

The ASX broke out of a three-day holding pattern after Wall Street took a vaccine setback and a spike in inflation in its stride. The S&P 500 put on 0.33 per cent overnight. The Nasdaq Composite led with a rise of 1.05 per cent.

“Although the yearly inflation measure touched its highest level in the two and a half years last month, investors looked past this surge while pushing global shares higher,” Kalkine Group CEO Kunal Sawhney said.

Last night’s share market response soothed concerns about a new US corporate reporting season. Goldman Sachs, JPMorgan Chase and Wells Fargo are due to launch the Q1 season tonight amid worries about elevated valuations.

“We may expect some volatility in equity markets this week as several major US financial institutions kick-off the first-quarter earnings season. It will be interesting to watch whether corporate earnings justify sky-high valuations of companies or unearth a shady side of the economic boom,” Mr Sawhney said. “Markets [were] setting a very high bar at current valuation levels,” he added.

Australian bond yields followed US yields lower, sliding five basis points this afternoon. The drop in borrowing costs encouraged investors into high-growth stocks whose valuations depend heavily on future earnings and repayment costs. The tech sector surged 2.05 per cent to its strongest level since late February when a jump in yields triggered a sharp sell-off in growth stocks.  

The WAAAX group of I.T. leaders all advanced. WiseTech gained 3.28 per cent, Afterpay 2.3 per cent, Altium 2.84 per cent, Appen 1.99 per cent and Xero 2 per cent.  

Gold stocks caught a lift from the precious metal’s traditional role as a hedge against inflation. Overnight data showed US consumer inflation last month recorded its biggest jump in eight and a half years. The Australian index of gold companies hit a two-month peak as Perseus climbed 6.72 per cent, Silver Lake Resources 5.44 per cent and Ramelius 5.2 per cent. Sector giant Newcrest added 4.06 per cent.

Winners’ circle

While gold and tech stocks saw the biggest returns, bond proxies and miners did much of the heavy lifting. Transurban and Goodman Group rose 1.69 per cent, Wesfarmers 1.36 per cent and CSL 1.19 per cent. BHP and Rio Tinto both gained 0.7 per cent.  

Macquarie Group and CBA were the best of the financial giants, rising 0.69 and 0.7 per cent, respectively. Westpac edged up 0.08 per cent. ANZ shed 0.03 per cent and NAB 0.26 per cent.

Iceni Gold landed on the boards with a splash, rising 45 per cent. Shares that listed at 20 cents hit 37 cents shortly after listing and finished nine cents ahead at 29 cents. The company’s principal project is 14 Mile Well in Western Australia. 

A resources upgrade lifted Galaxy Resources 8.28 per cent to its highest level in almost three years. The lithium miner raised the brine resource at its Argentinian project by 27 per cent and revised the resource estimate for lithium carbonate upwards by 13 per cent.

Beleaguered gold miner Resolute bounced 14.89 per cent after the Ghanaian government restored the lease for its Bibiani mine. However, the restoration wss heavily qualified. The government said it does not recognise the sale of the mine to Chinese company Chifeng Jilong Gold. Resolute announced in December that Chifeng had bought the mine for US$105 million. Resolute said it would consider its options.

The prospect of winning a share of the government’s post-pandemic infrastructure splurge lifted builder Cimic 2.13 per cent. Executive Chair and CEO Juan Santamaria told today’s AGM the company was well placed to secure a share of the $500 billion+ of tenders to be bid and/or awarded in 2021 and beyond.

DigitalX – arguably the closest thing the ASX has to a proxy for Bitcoin – surged 37.88 per cent after the cryptocurrency rallied 5.5 per cent overnight to an all-time high US$63,246.

Reddit favourite BrainChip jumped 19.81 per cent on news the company had started volume production of its processor for Artificial Intelligence devices. Production units are expected to be available in August.

Doghouse

Reopening plays came under mild pressure following a US decision to halt the rollout of the Johnson & Johnson vaccine. Star Entertainment Group declined 1.86 per cent, Flight Centre 1.99 per cent, Webjet 2.64 per cent and Qantas 1.14 per cent. 

Fortescue Metals was an outlier among the big three bulk metal producers, falling 0.59 per cent. Telstra fell further from Monday’s eight-month peak, easing 0.29 per cent. Oil and gas giant Woodside slipped 0.41 per cent.

Other markets

A broadly positive session on Asian markets saw the Asia Dow and China’s Shanghai Composite both gain 0.48 per cent. Hong Kong’s Hang Seng added 1.44 per cent. Japan’s Nikkei dropped 0.42 per cent.

US futures nudged higher late afternoon. S&P 500 futures added 3.7 points or 0.1 per cent.

Oil extended overnight gains, boosted by an upbeat demand outlook from OPEC and strong Chinese trade data. Brent crude rallied 76 cents or 1.2 per cent to US$64.43 a barrel.

Gold shaved $4.20 or 0.23 per cent off its 0.9 per cent overnight advance, easing to US$1,743.40 an ounce.

The dollar rose 0.24 per cent to 76.66 US cents.

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