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A news-heavy session ended with a third straight loss as investors weighed a surge in Covid cases, a rebound in employment, a mid-year budget, takeover action and the biggest capital raising in ASX history.   

The S&P/ASX 200 finished 31 points or 0.43 per cent in the red as an 8 per cent post-raise plunge in health giant CSL outweighed gains elsewhere.

Tech and healthcare were the best of the sectors. The banks and miners finished mixed.

What moved the market

The holiday season may be just around the corner, but investors had a blizzard of information to parse this session. A surge in US stocks overnight was soon forgotten as domestic issues dominated.

Ultimately, the market fell to its weakest finish in eight sessions as a decline in CSL proved an insurmountable obstacle. The index’s third largest company by weighting accounted for almost all of today’s loss.

CSL dived 8.16 per cent to a seven-month low after the health giant tapped investors for funds to acquire Swiss firm Vifor Pharma. Shares finished at $273, the placement price set by a book-build. Retail shareholders will get a chance to take part in a placement to raise an additional $750 million.  

The market temporarily trimmed its loss on mid-morning news the jobless rate dropped to 4.6 per cent last month from 5.2 per cent in October. Total employment increased by a record amount as NSW, Victoria and the ACT came out of lockdown.

“Aussie employers embarked on a hiring blitz in November with a record-breaking 366,100 workers landing a new job or were re-hired after an easing of Delta Covid-19 restrictions in Australia’s south-east,” CommSec said.

Both figures were much stronger than economists expected. The pre-announcement consensus was for employment to drop to 5 per cent on a jobs gain of around 200,000. The rise in employment was the largest single monthly gain on record dating back to 1978.

The data handed the federal government a welcome boost as Treasurer Josh Frydenberg handed down the mid-year budget. The Coalition government forecast inflation will outstrip wages growth this financial year, before wages overtake in 2022-23. By 2024, wages will be growing by 3.25 per cent as the unemployment rate falls towards 4.25 per cent.

Also affecting market sentiment was a record number of new Covid cases in NSW. The state reported 1,742 new cases, its highest daily total since the pandemic began. Victoria recorded 1,622 new cases.

The RBA once again set itself at odds with its US counterpart, downplaying the possibility of rate rises next year after the Federal Reserve signalled overnight it was getting ready to hike. Governor Philip Lowe today told an Australian audience inflationary pressures here were milder than in the US. The bank was still a “fair way” from achieving its inflation target for raising the cash rate.

US stocks pushed back towards record levels overnight after the Fed mapped out the path to higher rates. The bank indicated three increases were likely next year, followed by three more in 2023. The S&P 500 jumped 1.63 per cent.

Winners’ circle

Nickel miners IGO and Western Areas rallied on news IGO will acquire its rival for $1.1 billion. WSA’s board of directors unanimously backed the offer at $3.36 per share. IGO Managing Director and CEO Peter Bradford said the acquisition was a “logical consolidation within the Western Australian nickel landscape”.

WSA shares jumped 5.56 per cent. IGO shares overcame early weakness to advance 1.41 per cent.

Battered biotech Mesoblast bounced 10.9 per cent following positive feedback from the US regulator for a potential treatment for chronic lower back pain. The company plans to conduct a Phase 3 trial with the intention of seeking approval to launch the product in the US and European Union.

Tech stocks outperformed in line with last night’s Wall Street trend. WiseTech rallied 6.89 per cent, Appen 3.17 per cent and Altium 2.69 per cent. Afterpay bounced 1.7 per cent from a seven-month low.  

Property stocks were the session’s other standout. Stockland firmed 1.87 per cent after announcing a 12 cent estimated interim distribution. Abacus Property gained 2.5 per cent, Cromwell 2.33 per cent and Goodman 1.64 per cent.

Doghouse

Qantas declined 0.62 per cent after flagging an underlying loss in earnings of more than $1.1 billion this half. The airline hopes to reduce its earnings loss to $250-$300 million in the second half.

“This has been one of the worst halves of the entire pandemic, where most states had their borders closed and the majority of Australians were in lockdown. Domestically, our capacity fell to around 30 per cent of preCOVID levels for several months,” CEO Alan Joyce said.

The airline reduced its debt burden by selling land at Mascot in Sydney for $802 million. Domestic and international capacities are expected to lift dramatically in the second half.

The competition watchdog cleared the way for Woodside Petroleum to acquire BHP’s Petroleum business. The ACCC said there was adequate competition from rival suppliers.

BHP shares dropped 1 per cent and Woodside 1.31 per cent during a soft session for commodity producers. Industrial metals fell in the wake of an economic update yesterday that implied slower demand from China.

“Weak economic data weighed on commodity markets. This was exacerbated by ongoing concerns of the Omicron variants, which have led to renewed restrictions. Industrial metals and bulk commodities led the complex lower,” ANZ senior commodity strategist Daniel Hynes said.

Champion Iron fell 6 per cent, Alumina 2.4 per cent and Beach Energy 1.98 per cent.

Sims eased 1.43 per cent after acquiring a US recycling business. The Australian firm will pay US$37 million to acquire the assets of Baltimore-based Atlantic Recycling Group.

Other markets

Asian markets were mixed. The Asia Dow shed 0.07 per cent and Hong Kong’s Hang Seng 0.81 per cent. China’s Shanghai Composite gained 0.28 per cent and Japan’s Nikkei 1.76 per cent.

US futures hinted at further gains tonight. S&P 500 futures firmed nine points or 0.2 per cent.

Gold added to post-Fed gains, climbing US$18.30 or 1.04 per cent to US$1,782.80 an ounce.

Brent crude rallied 52 US cents or 0.7 per cent to US$74.40 a barrel.

The dollar eased 0.1 per cent to 71.59 US cents.

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