A tentative rally fizzled out as Australian traders joined Wall Street on the sidelines ahead of tonight's much-anticipated US inflation report and the start of a new US earnings season.
The S&P/ASX 200 rose as much as 24 points in morning action before trimming its gain to three points or 0.04 per cent.
A directionless session saw declines in bulk metals producers and CSL counterbalance advances in BNPL players, Woolworths and CBA.
What moved the market
Today's flat finish continued a lacklustre three-session run since Thursday's 13-month high. However, profit-taking has been minimal: the index has given back less than a tenth of the 260 points it put on during a powerful five-session winning streak across the Easter break.
Volatility has dropped and trading volumes have tapered on both sides of the Pacific ahead of two key "risk events" in the US. Tonight's consumer price index is expected to confirm a pick-up in pricing pressures. Tomorrow night marks the start of a reporting season that will reveal whether earnings have recovered as well as share market valuations imply.
"The fact that stocks remain perched near record highs suggests investors still believe the economic acceleration should be a powerful tailwind for stocks this quarter and ensure earnings growth," Stephen Innes, Chief Global Market Strategist at Axi, said.
"But with significant moves already in place and the 'easy recovery phase, money has been made', investors could still temper long duration and rates sensitive assets like gold if yields climb while struggling to resolve with what form and fashion the next leg of the reflation trade will take."
Today's economic data suggested the average Australian was more optimistic than the average investor. Consumer confidence jumped last week to its highest level since 2019. The ANZ-Roy Morgan consumer sentiment gauge climbed 6.4 points to 114.1 as Greater Brisbane emerged from lockdown and New Zealand opened its doors to Australian travellers.
"The receding of the Brisbane lockdown and announcement of the Trans-Tasman travel bubble has seen confidence jump sharply, to above its long-run average and the highest level since late 2019. The jump has occurred despite the delay in the COVID-19 vaccine rollout," ANZ Head of Australian Economists, David Plank, said.
A separate survey showed business conditions also improved. The NAB conditions measure jumped eight points last month to an all-time high. Confidence eased three points but remained elevated by long-term standards.
The BNPL sub-sector provided much of the day's fireworks. Z1P Co surged 17 per cent on record quarterly revenue and strong growth in its US business. Splitit jumped 8.3 per cent on news it will partner with a division of China's UnionPay to offer Chinese customers its instalment payment platform. Market leader Afterpay rose 3.1 per cent to a six-week high.
A strong week for initial public offerings saw Island Pharma more than double its market capitalisation upon debut. Shares in the viral drug company surged 110 per cent, mirroring Delorean Corporation's performance yesterday. Delorean shares eased 20.2 per cent this session.
The broader market's sideways drift was epitomised by the heavyweight financial sector. ANZ gained 0.1 per cent and Westpac less than 0.1 per cent. NAB shed less than 0.2 per cent. CBA was the only one of the majors to make any significant ground, rising 0.5 per cent.
Other heavyweight gains included Woolworths +0.9 per cent, Goodman +0.4 per cent and Newcrest +0.4 per cent.
Waste manager Cleanaway overcame early weakness after its bid to acquire French rival Suez Group's Australian assets was thwarted by a takeover. Cleanaway announced Suez had accepted a takeover offer from Veolia. Cleanaway said it still hoped to acquire a collection of Suez's Sydney assets for $501 million. The Australian company's share price edged up 2.4 per cent. Rival Bingo Industries jumped 10.5 per cent.
IGO climbed 1.5 per cent after announcing Regis Resources will buy its 30 per cent interest in the Tropicana gold mine for $903 million. The sale furthers IGO's transition to a pure battery minerals producer. Regis shares entered a trading halt while it raised capital for the purchase.
The utilities sector led the selling as the yield on ten-year Australian bonds climbed three basis points. AGL Energy and APA Group sagged 1.3 per cent. AusNet eased 0.5 per cent.
Rio Tinto declined 1.2 per cent, BHP 1.1 per cent and Fortescue Metals 0.9 per cent. Falls of 0.6 per cent in Transurban and 1.3 per cent in Sydney Airport helped pull the industrial sector lower. Brambles dipped 0.2 per cent. Telstra reversed 0.3 per cent from yesterday's eight-month high.
Energy companies shrugged off a modest overnight uptick in crude following a Houthi rebel attack on Saudi Aramco facilities. Woodside retreated 0.3 per cent and Oil Search 1.2 per cent. Beach Energy shed 2.6 per cent and Santos 0.6 per cent.
US futures faded as Asian markets turned mixed. The Asia Dow trimmed its advance to 0.07 per cent as China's Shanghai Composite fell 0.42 per cent. Hong Kong's Hang Seng slashed its gain by almost two-thirds to 0.46 per cent, Japan's Nikkei added 0.77 per cent. S&P 500 futures fell four points or 0.1 per cent.
Oil added to last night's 33-cent gain. Brent crude rose 29 cents or 0.5 per cent to US$63.57 a barrel.
Gold reversed $6.70 or 0.4 per cent to US$1,726 an ounce.
The dollar faded 0.34 per cent to 76.01 US cents.