The ASX gave up its early gains in afternoon trade to close marginally higher as struggling commodities stocks weighed down wins from healthcare and tech.
The S&P/ASX 200 index closed 0.053 per cent higher at 7569.2 points — still higher than it has been over the past two months, but falling short of January’s 2022 high.
Ramsay Health Care held onto massive gains and buoyed the rest of the healthcare sector, but market heavyweights Rio Tinto, BHP, Woodside, and Santos each closed in the red.
What moved the market
A stellar trading session across Wall Street overnight spurred early gains on the ASX, but Australian investors could only ignore slipping commodity prices for so long.
Crude oil prices took a blow overnight after the International Monetary Fund (IMF) downgraded its 2022 growth forecasts by 0.8 per cent to 3.6 per cent.
With the looming threat of further energy sanctions in Russia and this week’s closure of Libya’s largest oilfield, international benchmarks Brent Crude and West Texas Intermediate (WTI) each declined more than 5 per cent overnight.
By market close, oil prices have recouped some of the lost ground, with Brent up 1.24 per cent to US$108.5 a barrel and WTI up 0.8 per cent to US$103.4 a barrel. Still, these prices are well below yesterday’s market close, prompting declines across the ASX energy sector.
“Both contracts [Brent and WTI] continue to suffer from illiquidity in the futures markets as high volatility and raising margins impact volumes, magnifying intraday ranges,” Jeffrey Halley, a Senior Market Analyst at OANDA Asia Pacific, said.
“With so much volatility in intraday oil prices and extreme reactions to headline risks, technical levels have become rather irrelevant.”
Gold prices continued to their decline, down 0.65 per cent to US$1946.50 a tonne. Silver fell 0.91 per cent to US$25.17 a tonne.
Aluminium retreated 0.75 per cent to US$3261 a tonne, and iron ore dipped 0.67 per cent to US$154.58 a tonne.
Lead and coal held onto their gains, up 0.34 per cent and 3.85 per cent, respectively.
Consumer discretionary stocks followed Wall Street’s lead, with the sector supporting the gains in health care.
Australian 10-year bond yields rose to 3.1 per cent.
Ramsay Health Care remained today’s top performer — and significantly so — after receiving a takeover bid from US private equity giant KKR valuing Ramsay at $20.05 billion.
KKR is offering $88 per Ramsay share for full control of the listed private hospital operator — a 37 per cent premium to Ramsay’s last closing price of $63.49. Ramsay shares closed 24.4 per cent higher at $80.10.
Health care stocks made up some of the other major winners for the day as Ramsay’s news lifted the sector. Pro Medicus closed 5.2 per cent higher at $51.61 a share, and Sonic Health Care ticked up 2.45 per cent to $36.37. Biotech giant CSL gained 0.82 per cent and closed at $264.50.
Fortescue Metals outperformed a largely weak materials sector, but closed 0.23 per cent lower at $21.68 per share.
Meanwhile, junior rare earths explorer Petratherm nearly tripled its share price in a single session after releasing new assay results from drill testing at its Comet project in South Australia’s Northern Gawler Craton region.
With 23 of 44 holes reporting grades of over 1000 parts per million (ppm) total rare earth oxides, Petratherm said the results marked a “major high-grade rare earth discovery”. Shares in Petratherm skyrocketed 161.54 per cent to 17 cents.
Meanwhile, Big River Gold tacked on 27.78 per cent after receiving an all-cash takeover offer from TSX-listed Aura Minerals valuing shares at 36 cents each.
While the offer represents a 33.33 per cent premium to Big River’s closing price of 27 cents each yesterday afternoon, the deal may come as only a small respite to long term holders of the stock which traded at around 60 cents each less than two years ago. Shares in Big River closed at 34 cents.
Energy stocks made up the bulk of the losers today, with Woodside down 0.7 per cent. Ampol, however, bucked the trend, gaining 0.12 per cent.
Santos retreated 1.08 per cent to $8.23 after announcing a $338 million share buyback to begin in May. Santos said its current share price did not reflect its true value, and the buyback was part of a new capital management framework for the business.
Financial advisor business HUB24 tumbled 6.47 per cent to $24.28 a share, seemingly in a delayed reaction to its latest quarterly report, released yesterday.
AGL Energy fell 3.18 per cent to $8.52 after announcing a fault at its Loy Yang A Power Station in Victoria had taken a generator out of action. The energy giant warned the generator may be out of action until August. The Loy Yang A station supplies around 30 per cent of Victoria’s electricity.
Overseas, Asian markets continued their rally, with only the Shanghai Composite red by 0.92 per cent.
The Asia Dow was up 0.85 per cent to 3473 points, Japan’s Nikkei 225 was up 0.87 per cent to 27,218, and the Hang Seng held onto a skinny 0.04 per cent win at 21,036.
The Australian dollar tacked on 0.6 per cent to 74.2 US cents.