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A third day of gains handed the share market its strongest weekly return in seven weeks as volatility continued to abate across global markets.

The S&P/ASX 200 rallied 34 points or 0.5 per cent to its highest close in eight sessions. The index rose steadily this week, advancing on four out of five sessions for a weekly tally of 116 points or 1.7 per cent.

What moved the market

Telstra, Fortescue Metals and Rio Tinto spearheaded today’s rally, offsetting a weak session for CSL and CBA. Record highs for Macquarie Group, News Corp and Washington H Soul Pattinson helped.   

Volatility measures here and in the US fell to pre-pandemic levels this week as ripples from a rise in borrowing costs dissipated. The S&P/ASX 200 VIX dropped to 11.2 today, below where it sat when the pandemic sell-off started last February. The VIX, Wall Street’s “fear gauge”, closed below 19 on Monday for the first time in 13 months.

A three-week panic about rising borrowing costs faded during the week as bond yields retreated. The yield on Australian ten-year bonds this afternoon hovered near its lowest level in a month. The US ten-year yield also pulled back from last week’s 14-month high.

“Looking to next week, there a few reports that recent losses in bond funds over the past few weeks may see a significant portfolio rebalancing out of equities and into bonds to maintain asset allocation weights, and that such rebalancing into quarter end may be behind some of the recent pullback in yields,” NAB Director of Economics, Tapas Strickland wrote.   

The dollar moved sharply lower this week as the improving economic outlook lifted the greenback, while wobbles in raw materials weighed on so-called commodity currencies. A 6 per cent plunge in crude oil earlier this week helped send the Aussie to its weakest level since early February.

“Oil price charter in the near term depends on whether the OPEC+ will rollover their current supply curbs into May, while demand revival will be an important factor to look at amid economic reopening and fiscal and monetary support. Notably, sliding energy prices may have a cascading impact on commodity-linked currencies such as AUD and NZD,” Kalkine Group CEO Kunal Sawhney said.

Overnight, US stocks rebounded as dip-buyers took advantage of a third day of weakness. The Dow finished 199 points or 0.62 per cent ahead after earlier falling as much as 348 points. The S&P 500 gained 0.52 per cent.

Winners’ circle

Telstra climbed 2.4 per cent to a seven-month peak on news it will scrap its New Zealand listing. The telecom will delist from the NZX to “simplify its administration and streamline its shareholder services”.

Woodside climbed 1.1 per cent as oil trimmed its overnight slide. Brent crude bounced 55 cents or 0.9 per cent to US$62.35 a barrel, reclaiming almost a quarter of last night’s loss.

Santos edged up 1.1 per cent after production restarted at its Ningaloo Vision floating production and storage vessel following scheduled maintenance. The company aims to achieve production of 10,000 barrels of oil per day from three fields off the coast of WA within weeks.

The big three iron ore producers rebounded from a three-week slide after China toughened pollution controls. Fortescue Metals advanced 3.8 per cent, Rio Tinto 2.2 per cent and BHP 0.4 per cent.

Another mixed session for the banks saw ANZ rise 1 per cent, Westpac 0.9 per cent and NAB 0.8 per cent. CBA dropped 0.6 per cent.

AMP bounced 0.9 per cent from yesterday’s setback after dousing reports CEO Francesco De Ferrari had resigned. The wealth manager said Mr De Ferrari remained in charge and was working with the board on “the future strategy and leadership of the group”.

News Corp rallied 2 per cent to a record after acquiring digital business news outlet Investor’s Business Daily for US$275 million from O’Neil Capital Management. Financial firms Macquarie Group and Washington H Soul Pattinson also hit all-time highs. The Silver Doughnut finished with a gain of 0.4 percent. Soul Patts closed 1.2 per cent in the red.

Doghouse

Vaccine manufacturer CSL has risen all week, but stumbled 0.9 per cent this session. Newcrest -1.3 per cent, Transurban -1.2 per cent and Aristocrat Leisure -0.4 per cent were other drags. Afterpay bounced off a two-and-a-half-week low, closing 0.4 per cent higher.

TPG Telecom hit an all-time low after founder David Teoh quit as chairman. Mr Teoh led the company from its inception to its merger with Vodafone Hutchison. Canning Fok will take over as chair. Shares in the company fell 6.7 per cent.

The session’s worst performers were medical device developer Polynovo -5.3 per cent, Auckland International Airport -3.2 per cent and student placement service IDP Education -3.2 per cent.

Other markets

The Asia Dow rose 1.05 per cent as volatility on regional markets abated. China’s Shanghai Composite rose 1.37 per cent, Hong Kong’s Hang Seng 1.14 per cent and Japan’s Nikkei 1.57 per cent.

US futures firmed with Asian gains. S&P 500 futures rose 13 points or 0.3 per cent. Nasdaq futures added almost 0.5 per cent.  

Gold faded 90 cents or 0.1 per cent to US$1,724.20 an ounce.

The dollar climbed 0.27 per cent to 76.13 US cents.

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