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A red-letter day saw the S&P/ASX 200 breach the 7000 mark for the first time since February 2020 before sealing its longest winning run of the year with a fifth straight advance.

The index ran as high as 7012.4 before closing 71 points or 1 per cent ahead at 6999. At today's peak, the index drew within 2.6 per cent of last year's all-time high of 7197.2.

The All Ordinaries also hit a pandemic-era high, rising 73 points or 1 per cent to 7250. The broader of the two indices closed one decent session off record levels after drawing within 0.4 per cent of its old peak of 7289.7.

What moved the market

The ASX has trailled Wall Street since the pandemic meltdown, but seems intent on closing the performance gap. The local market has put on more than 260 points in five sessions across the Easter break.

What has changed? A retreat in bond yields has pushed inflation worries temporarily into the background. Mining stocks have been boosted by a surge in iron ore prices this week back above US$170 a tonne. Travel and tourism companies have benefited from Brisbane's bounce out of lockdown and the creation of the NZ-Australia travel bubble. A decline in the dollar from three-year highs has relieved pressure on exporters.

The rally continued this week even as Wall Street paused for breath. The S&P 500 has barely moved over the last two sessions as a new quarterly reporting season looms. Next week should reveal whether stock valuations have outpaced economic reality. Analysts anticipate a strong rebound in Q1 profits from the same period last year when the unfolding crisis triggered a meltdown.

"Earnings season should be pretty good as we are seeing the economy reopen, jobs coming back... the expectation is increased guidance,” Paul Nolte, portfolio manager at Kingsview Asset Management, told Reuters.

Rising US futures hinted at potential gains tonight. S&P 500 futures climbed 23 points or almost 0.6 per cent. Nasdaq futures rallied 0.9 per cent as bond yields retreated.

Winners' circle

All 11 sectors rose. Eighteen of the twenty market behemoths of the ASX 20 rallied. Gains ranged from a slim 0.3 per cent for energy giant Woodside to 2.6 per cent for BHP. The big three miners surged as iron ore responded to soaring steel rebar prices on the Shanghai Futures Exchange. Rio Tinto put on 2.2 per cent and Fortescue Metals 2.5 per cent.

Benchmark ore imported into China hit US$173.63 a tonne yesterday, just shy of January's nine-and-a-half-year high of US$174.07. Prices improved as Chinese steel futures touched fresh peaks following a clampdown on pollution in the nation's leading steelmaking city, Tangshan.

“Chinese government restrictions continue to be supportive for prices,” ING commodity strategists told Reuters.

Westpac shrugged off another tiff with a regulator, rising 1.3 per cent despite ASIC launching civil proceedings regarding the alleged sale of unwanted consumer credit insurance. The bank said around 384 customers were affected, and it no longer sold the product.  

NAB climbed 1.1 per cent to a four-week high. ANZ also added 1.1 per cent. CBA tacked on 0.7 per cent.

Woolworths rallied 1 per cent to within a few cents of its January pandemic-era peak. Coles, which has underperformed its rival since February's half-year report, rose 0.6 per cent. Afterpay added 1.3 per cent, Telstra 1.2 per cent, CSL 1.1 per cent and Wesfarmers 0.7 per cent.

Health and beauty specialist McPherson's edged up 1.4 per cent after the board recommended shareholders reject an unsolicited takeover offer from Gallin. The company said the offer "profoundly undervalues MCP" and was timed to "exploit McPherson's recent share price weakness following a period of challenging trading conditions".

EML Payments climbed another 5.7 per cent following yesterday's announcement it will acquire European payments provider Sentenial. AMP bounced 2.8 per cent from yesterday's 11-month closing low.

Doghouse

Property giant Goodman slipped 0.4 per cent. Toll road operator Transurban shed 0.1 per cent.

Gold stocks were mixed after the precious metal dipped to its first loss in five sessions. Resolute Mining fell 3.1 per cent. Newcrest gained almost 2 per cent.

Mining services company Worley eased 1.5 per cent despite a contract win. The company announced it had secured the engineering services contract to convert Phillips 66's San Francisco refinery into a facility for manufacturing renewable fuels.

Uranium hopeful Greenland Minerals lost almost half its market value after the anti-mining Community of the People party won 37 per cent of the electoral vote. The result threatens Greenland Minerals' hopes of mining uranium and other minerals on the island. The share price tumbled 45 per cent before the company requested a trading halt.

Other markets

Asian markets healed as the session wore on. The Asia Dow edged up 0.08 per cent. China's Shanghai Composite gained 0.25 per cent and Hong Kong's Hang Seng 1.05 per cent. Japan's Nikkei trimmed its loss to 0.15 per cent.

Oil reversed most of last night's gains. Brent crude sank 39 cents or 0.6 per cent to US$62.77 a barrel. Gold reversed early weakness as the greenback fell, rising $2 or 0.1 per cent to US$1,743.60 an ounce.

The dollar climbed 0.35 per cent this afternoon to 76.37 US cents.

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