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An impervious share market battled through a blizzard of bad news to a record close, supported by earnings optimism and gains in banking and technology stocks.

The S&P/ASX 200 overcame a mid-session wobble, rising 24 points or 0.32 per cent.

The index briefly turned negative after NSW and China reported the worst case numbers of their current Covid outbreaks, economic data disappointed and US futures traded negative.

Advances for Afterpay, Telstra and most of the banks helped offset declines in Transurban, CSL and most of the miners. James Hardie, Challenger, Coronado and Megaport rallied after reporting earnings.

What moved the market

Market bears were served plenty of food for their convictions this session. New South Wales moved further from lockdown relief after recording a record 356 new local coronavirus cases. Shortly after, China reported 181 new infections, the highest yet during an outbreak that has impacted 13 provinces and triggered heavy falls on commodity markets.

The day’s economic data underlined the impact of Covid restrictions. Consumer confidence fell last week as south-east Queensland and Victoria announced snap lockdowns. The ANZ-Roy Morgan weekly measure fell 3.1 points to 98.6, its lowest level since November.

“Australian consumers have moved into pessimistic territory for the first time since late last year,” tweeted David Plank, ANZ Head of Australian Economics.

Business confidence also skidded, NAB’s July index sagged to -8 from a June reading of +11. Business conditions remained positive at +11, but well down from the June reading of +25.

US futures declined before paring losses as Chinese and Hong Kong shares overcame early weakness. S&P 500 futures halved their fall to five points or 0.11 per cent. The Shanghai Composite was last up 0.44 per cent. The Hang Seng gained 0.7 per cent.

Overnight, the S&P 500 and Dow declined as increasing Covid cases weighed on commodity markets. The S&P 500 eased 0.09 per cent. The Dow shed 0.3 per cent.

Despite the negatives, the bulls emerged victorious once again, thanks in part to expectations for a bumper profit season. Companies scheduled to report tomorrow saw solid gains.

Commonwealth Bank advanced 1.54 per cent to within a few cents of a record. Insurer IAG gained 1.15 per cent. Mineral Resources climbed 2.15 per cent during a strong session for lithium miners (more below).  

Winners’ circle

Lithium miners were the index’s best performers as optimism over demand for the battery component lifted share prices to fresh heights. JPMorgan reportedly lifted its spodumene price target by 31 per cent this morning.  

Orocobre climbed 8.74 per cent. Pilbara Minerals rallied 10.95 per cent. Galaxy Resources added 8.61 per cent.

A profit upgrade boosted James Hardie 2.9 per cent to an all-time high. The fiber cement specialist lifted its full-year guidance for adjusted net income to US$550 – US$590 million from previous guidance of US$520 – US$570 million. The upgrade followed a record quarter that included a 35 per cent increase in global net sales.

Annuities specialist Challenger added 1.9 per cent after increasing assets under management by 29 per cent and declaring a full-year statutory net profit of $592 million. The company lifted its full-year dividend by 14 per cent to 20 cents per share to reflect an improved capital position. The company also announced CEO and Managing Director Richard Howes will stand down. Howes will remain until March 2022 while a successor is found.

Megaport climbed 3.05 per cent on news the network-as-a-service provider moved closer to profitability. The tech firm increased full-year revenues by 35 per cent to $78.28 million and grew its customer base by 24 per cent. The net loss for the year was $55 million. CEO Vincent English said the firm’s mission for the coming year was to “Scale up, scale out”.

Coal miner Coronado edged up 0.52 per cent as increases in half-year production and sales were offset by lower prices and negative currency movements. Revenues increased 12.1 per cent and sales volumes by 6.6 per cent. Adjusted earnings sank 26.4 per cent due to higher costs and freight charges. The half-year net loss was $96.1 million.

Beleaguered tech firm Nuix rose 1.15 per cent after outlining more details of ASIC’s investigation into potential contraventions of the Corporations Act. The company said the regulator was exploring Nuix’s pre-listing financial statements, prospectus and market disclosures. The firm said it was confident it had complied with its obligations.

Telstra rose 0.79 per cent to an 18-month high. Afterpay gained 3.24 per cent, Aristocrat Leisure 1.98 per cent, Wesfarmers 0.62 per cent and Goodman 0.55 per cent.

A mixed session for the banks and miners saw CBA climb 1.54 per cent, Westpac 0.87 per cent, NAB 0.19 per cent and BHP 0.14 per cent. ANZ dipped 0.03 per cent, Rio Tinto 0.59 per cent and Fortescue 1.1 per cent.

Doghouse

Gold stocks sagged for a second day following yesterday’s “flash crash”. The price of gold dived more than 5 per cent yesterday before paring its loss to 2.1 per cent.

Here, Ramelius fell 5.9 per cent to a four-month low. St Barbara shed 4.96 per cent, Westgold 4.03 per cent and Newcrest 0.2 per cent.

Airline Regional Express finished flat after downgrading its full-year outlook to reflect the hit from lockdowns. The airline slashed its full-year guidance from a statutory loss of $15 million to $18 million.

“The lockdowns that eventuated in New South Wales in June and the ensuing border closures have significantly impacted revenue,” the company said. “Rex will be implementing temporary stand downs within the Company after consultation with the stakeholders,” it added.

Toll road operator Transurban fell 2.78 per cent to a two-and-a-half-month low after warning yesterday about the earnings impact of lockdowns.

Other markets

Gold rebounded from yesterday’s “flash crash”. In electronic trade, the yellow metal bounced US$8.10 or 0.47 per cent to US$1,734.60 an ounce.

Brent crude rose 70 US cents or 1 per cent to US$69.74 a barrel.

The dollar inched up 0.01 per cent to 73.3 US cents.

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