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The share market secured its longest weekly winning streak in more than a year after weathering profit-taking today after Wall Street’s “peak-inflation” relief rally ran out of gas.

The S&P/ASX 200 eked out a fourth week of gains. A strong session yesterday proved crucial to a skinny weekly advance of 17 points or 0.2 per cent. The current run is the longest since June 2021.

The index shed 38.5 points or 0.54 per cent today as eight of eleven sectors declined. Energy was the only sector to resist today’s downtrend with any vigour.

What moved the market

Traders took some money off the table amid speculation the market needs a breather after a strong recovery from the June lows. At yesterday’s two-month high, the ASX 200 had bounced 670 points in eight weeks.

“Given the ASX has rallied over 10% from the June low and bullish volatility is receding, we think bulls should be cautious at these highs as markets are now vulnerable to a retracement. A move down to 6900 (at a minimum) appears the more likely path,” City Index senior market analyst Matt Simpson said.

Overnight, peak-inflation euphoria faded in the US despite supportive data on producer prices. The S&P 500 slid to a loss of 0.07 per cent. The Dow clung on to a gain of 27 points after earlier rising more than 340 points.

“The short-term euphoria in the market following the cooler-than-expected reading on CPI [consumer prices] on Wednesday faded away as investors probably realised that a lot more needed to be done by the Fed to sustainably lower inflation. Even some Fed officials commented that the battle against inflation is far from over,” Kunal Sawhney, chief executive of research group Kalkine, said.

“Worries about a possible recession still loom over the market. The 10-year bond yields rose ten basis points from 2.79% late Wednesday to 2.89% in a big move.” he added.

A mixed domestic reporting season continued with a well-received update from insurer IAG and a negative response to reports from ResMed, Baby Bunting and Avita Medical.

Winners’ circle

Energy was the only sector to offer a decent return, rising 2.3 per cent after Brent crude poked its head back above US$100 a barrel. The rally followed a supportive demand forecast from the International Energy Agency.

Woodside gained 3.74 per cent. Beach Energy added 3.06 per cent. Santos put on 0.84 per cent.

IAG firmed 1.08 per cent after announcing a return to profit. The insurer reported a full-year net profit of $347 million, versus a net loss of $427 million the previous year. Gross written premiums increased by 5.7 per cent.

MyDeal edged up 0.97 per cent after the competition regulator cleared the way for Woolworths to acquire the online retailer. The Australian Competition & Consumer Commission said it would not oppose the acquisition. Woolworths shares inched up  0.08 per cent.  

Telstra bounced 1.01 per cent after yesterday’s trading update. NAB, Westpac and ANZ also advanced, adding 0.5-0.82 per cent.

Doghouse

ResMed declined 3.09 per cent as a contraction in margins took a little of the shine off a strong full-year result. The sleep treatment specialist grew revenue by 12 per cent to US$3.6 billion. Income from operations increased 11 per cent. Gross margins shrank by 90 basis points to 56.6 per cent.

Baby Bunting eased 4.94 per cent after full-year profit fell short of market expectations. The infant goods retailer reported a 14.6 per cent increase in net profit to $19.5 million. Sales grew 8.3 per cent to $507.3 million.

Skin restoration specialist Avita Medical slumped 15.64 per cent after its half-year loss blew out by 47 per cent to US$15.7 million. Operating expenses increased 12 per cent.

A week-long rally in lithium miners stuttered as traders took advantage of recent gains. Lake Resources declined 13.48 per cent. Liontown shed 5.56 per cent. Core Lithium dipped 2.97 per cent.

Growth stocks retreated as the cost of borrowing increased. The yield on ten-year Australian government bonds jumped 14 basis points to 3.43 per cent.

Telix Pharmaceutical slid 7.67 per cent, Novonix 8.56 per cent and Nanosonics 6.43 per cent.

Other markets

A mixed session on Asian markets saw the Asia Dow advance 1.07 per cent, Japan’s Nikkei index 2.46 per cent and Hong Kong’s Hang Seng 0.38 per cent. China’s Shanghai Composite slipped 0.1 per cent.

S&P 500 futures overcame a mid-day slump to rally nine points or 0.2 per cent.

Oil retreated after trading briefly above US$100 a barrel overnight. Brent crude declined 55 US cents or 0.55 per cent to US$99.05 a barrel.

Gold for December delivery slipped 70 US cents or 0.04 per cent to US$1,806.50 an ounce.

The dollar climbed 0.28 per cent this afternoon to 71.23 US cents.

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