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Records for Wesfarmers and companies reporting strong earnings helped the share market inch to a second straight all-time closing high.

The S&P/ASX 200 finished eight points or 0.11 per cent ahead at 7511 after rising as high as 7526.4.

Gains in the banks, CSL and Wesfarmers helped the index ride out weak US leads and declines in the major miners. Investment manager Pinnacle, furniture retailer Nick Scali and industrial property giant Centuria hit all-time highs following well-received profit updates.   

What moved the market

The market continued to break fresh ground as the banks took over the running from the miners. The financial and materials sectors constitute 48.5 per cent of the ASX 200 by weighting, making a formidable tag team.

The miners kept the market moving higher through the early weeks of the Greater Sydney lockdown while the banks tracked sideways, crimped by falling lending rates and the threat of a surge in bad debts. Now the miners have started to cool with softening commodity prices, the banks are back in the ascendancy.

Commonwealth Bank rallied 1.15 per cent to its highest since mid-June. ANZ firmed 0.57 per cent, NAB 0.84 per cent and Westpac 0.2 per cent.

Sentiment towards the sector was boosted by Bendigo & Adelaide Bank‘s announcement it will release some of the cash buffer it set aside against the impact of the pandemic. The bank said it will release $19.4 million. The share price climbed 1.24 per cent.

“The Collective Provision release reflects the improved economic outlook for the Australian economy, including rising GDP, lower unemployment and higher residential property prices compared to 31 December 2020,” the bank said.  

The market took an hour to shake off negative leads from Wall Street and commodity markets. The Dow dropped 0.92 per cent overnight and the S&P 500 shed 0.46 per cent after payrolls data disappointed and the Federal Reserve gave further clues it is preparing to reduce support for the economy.

ADP private payrolls rose by just 330k against expectation for a 690k rise, the smallest gain since February,” NAB currency strategist Rodrigo Catril said.Cautious remarks by ADP’s chief economist, Nela Richardson, didn’t help sentiment either, noting that the July report was a marked a ‘slowdown from the second quarter pace in jobs growth’,” he added.

Winners’ circle

The domestic earnings season is in its infancy, but showing promising signs. Three companies hit records this session after reporting.

Investment manager Pinnacle closed 8.95 per cent higher after lifting full-year net profit 108 per cent to $67 million. The company will double its full-year dividend to 17 cents.

Industrial storage king Centuria hit an all-time high on news full-year statutory net profit soared to $611.2 million from $75.3 million in FY20. Funds from operations increased to $91.4 million from $63.5 million. The trust benefitted from acquisitions and strong demand for cold storage and data centres. The share price rose as high as $3.93 before trimming its advance to 0.26 per cent at $3.86.

Nick Scali also touched a high after announcing full-year profits doubled. Online sales increased from $3 million in FY20 to $18.3 million last financial year. Store sales saw revenue growth of 34 per cent. The share price hit a record $12.96 before drifting 0.08 per cent to $12.31.

The month-long reporting season hots up next week with reports from CBA, AMP, Telstra, IAG, Suncorp, QBE, Transurban and AGL.

Businesses that generate much of their earnings in US dollars benefitted from an up-tick in the greenback. Overnight, the US dollar index inched to its highest level in a week.

Aristocrat Leisure put on 2.26 per cent, CSL 0.52 per cent and Macquarie Group 0.94 per cent.

REITs were among the pick of the sectors following Centuria’s result. Unibail-Rodamco-Westfield gained 2.44 per cent, Goodman 1.8 per cent and Abacus 1.88 per cent.

Wesfarmers notched a second straight record, rising 1.28 per cent. Other notable gains included Woolworths +0.81 per cent, Coles +0.72 per cent and Telstra +0.27 per cent.

Gold miner Resolute rallied 4.5 per cent after striking a deal of sell its Bibiani mine in Ghana to Canadian miner Asanate Gold for US$90 million. The deal has the approval of Ghana’s Minister of Lands.

Kimberly iron ore explorer Pantera Minerals made a spectacular start to life on the boards. Shares that listed this morning at 20 cents rose as high as 55 cents before trimming their advance to 102.5 per cent at 40.5 cents.

Doghouse

A stop-start week for bulk metal miners continued with a reversal of yesterday’s gains. The big three have struggled for traction as the spread of the delta Covid-19 variant in China depressed commodity prices. Overnight, iron ore, copper and crude declined.

BHP retreated 1.7 per cent, Fortescue Metals 3.4 per cent and Rio Tinto 1.69 per cent. Woodside Petroleum shed 1.54 per cent.

Further down the food chain, Nickel Mines shed 3.52 per cent, Champion Iron 3.34 per cent and Mineral Resources 3 per cent.

Other markets

US futures trimmed gains as Asian markets turned mixed. S&P 500 futures climbed six points or 0.14 per cent.

The Asia Dow crept up 0.15 per cent. Japan’s Nikkei added 0.49 per cent. China’s Shanghai Composite fell 0.13 per cent and Hong Kong’s Hang Seng 0.37 per cent.

Oil rose for the first time in four sessions. Brent crude rallied eight US cents or 0.11 per cent to US$70.46 a barrel.

Gold retreated US$3.20 or 0.18 per cent to US$1,811.30 an ounce.

The dollar rose 0.15 per cent to 73.93 US cents.

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