The share market trimmed a losing week before another sharp drop in iron ore ate into today's advance.
The S&P/ASX 200 finished 32 points or 0.45 per cent ahead despite accelerating losses among the iron ore majors as Chinese ore futures tanked more than 9 per cent.
The mid-session reversal in miners took some of the shine off the index's first advance since Monday. Oil companies, utilities and banking stocks led today's rally. Commonwealth Bank hit a new record.
Today's rebound trimmed the index's loss for the week to 67 points or 0.9 per cent.
What moved the market
A relief rally in the US encouraged Australian investors to take advantage of yesterday's four-week closing low. The ASX 200 bounced as much as 73 points before a second day of sharp declines on the Dalian Commodity Exchange undercut the advance. Benchmark iron ore futures dived 9.4 per cent this afternoon. Coking coal and steel rebars also fell.
Fortescue Metals led the retreat, falling 2.77 per cent. Rio Tinto dropped 2.01 per cent. BHP lost 1.55 per cent.
"The price of the steelmaking ingredient seems to be taking a breather," Kalkine Group CEO Kunal Sawhney said. Ore prices fell 7.5 per cent yesterday.
"However, despite the recent retreat, ongoing supply constraints and burgeoning steel demand are pointing towards robust market fundamentals for iron ore," Mr Sawhney said. "These bullish factors are expected to keep iron ore prices at the upper end of the trading range for the next few months. As the COVID-19 vaccine rollout continues, demand for iron ore is further expected to improve following a potential return of normalcy in more parts of the world."
Commonwealth Bank rose for a third day since reporting profits doubled last quarter as home loans and business lending accelerated. The largest of the big four banks has the $100 level in sight after hitting an all-time high of $97.38 today. Shares finished 0.63 per cent ahead at $96.58.
Wall Street provided the platform for today's recovery after bargain-hunters decided this week's 4 per cent decline in the S&P 500 was deep enough. The index bounced 1.22 per cent overnight. The Dow gained 1.29 per cent and the Nasdaq Composite 0.72 per cent.
Rising US futures hinted at further gains tonight. S&P 500 futures rallied 22 points or 0.55 per cent. Nasdaq futures climbed 88 points or 0.67 per cent.
A rebound in revenues helped lift burns specialist Avita Medical 3.3 per cent. Third-quarter revenue more than doubled to $8.8 million from $3.9 million in the corresponding period last year when pandemic lockdowns limited medical procedures unrelated to Covid. The company declared a net loss of $6 million for the quarter.
The financial heavyweights trimmed three days of losses. Macquarie Group put on 2.25 per cent, ANZ 0.99 per cent, Westpac 0.87 per cent and NAB 1 per cent.
Oil Search led an advance in the energy sector, rising 2.96 per cent. Santos rallied 2.64 per cent. Woodside added 1.07 per cent.
REITs bounced as bond yields eased. Vicinity Centres gained 2.34 per cent, Cromwell 2.34 per cent and Goodman 1.13 per cent.
Supply-chain logistics company Brambles edged up 0.19 per cent to a three-month high amid growing optimism about this year's recovery in global trade. Other notable moves at the top end of the market included Aristocrat Leisure +2.13 per cent and Transurban +1.38 per cent.
On the wider market, broker upgrades helped lift Whitehaven Coal 9.16 per cent and Treasury Wine Estates 6.07 per cent.
A mixed session for the battered tech sector saw Afterpay gain 2.19 per cent, Nuix 2.06 per cent and Computershare 2.54 per cent. Xero fell 4.17 per cent and WiseTech dipped 0.88 per cent.
Synlait Milk hit an all-time low following the resignation of Chief Financial Officer Angela Dixon. General Manager Supply Chain Rob Stowell will act as interim CFO. Ms Dixon is the third senior executive to depart the NZ dairy company in two months. Shares fell 2.78 per cent to $2.78.
Mining services provider NRW Holdings hovered near 12-month lows following yesterday's glum outlook from rival Perenti Global. NRW shares fell 1.28 per cent.
Miners filled most of the bottom rungs on the index. Pilbara Minerals declined 5.19 per cent, Nickel Mines 4.29 per cent and Lynas Rare Earths 4.06 per cent.
"Commodity prices were softer overnight, including base metals and iron ore, the former from the general market volatility as an excuse for some retracement from the recent reflation bull run, the latter after the Chinese Premier urged his country to deal with the commodity price surge and its impact. It’ll be interesting to see how the commodity complex trades today and into next week," NAB Director and Senior Economist David de Garis said.
Gold miner Resolute faded 1.71 per cent after confirming former CFO Stuart Gale as Managing Director and CEO. Mr Gale has been acting in the role since the resignation of John Welborn in October.
Asian markets extended gains in afternoon trade. The Asia Dow advanced 0.94 per cent. China's Shanghai Composite rose 1.43 per cent, Hong Kong's Hang Seng 0.82 per cent and Japan's Nikkei 2.3 per cent.
Oil continued to lose ground following the reopening of a major US fuel pipeline closed by a ransomware attack. Brent crude fell 34 cents or 0.51 per cent to US$66.71 a barrel. Gold rose $1.90 or 0.1 per cent to US$1,825.90 an ounce.
The dollar edged up 0.15 per cent to 77.35 US cents.