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The share market continued to put the September blues behind it, rising to its highest level of the month after employment data showed the hit from lockdowns may be lighter than economists anticipated.

The S&P/ASX 200 finished 39 points or 0.54 per cent ahead following a bout of late profit-taking. Earlier, the index touched its highest level since September 28. 

Eight of eleven sectors advanced amid signs the contraction from this year’s lockdowns may be shallower than expected. Technology and gold stocks spearheaded gains. The energy sector took a breather following a nine-month high earlier this week.

What moved the market

Positive leads from Wall Street and commodity markets gave the ASX an early boost before the mid-morning September jobs report defied economists’ direst predictions. The official unemployment rate rose just 0.1 per cent to 4.6 per cent from 4.5 per cent in August.

Overall, the September survey was better than expected with a modest fall in employment, a modest rise in unemployment and modest lift in hours worked. It is has set the basis for a much better outcome for the labour market through the latest round of lockdown,” Westpac senior economist Justin Smirk said.   

“Vic was the hardest hit, as expected, but it was not as bad as we thought it could be plus there are signs that the NSW economy may have started to recover even before the lockdown ended,” he added.

CommSec chief economist Craig James was more guarded about the result, but also saw reasons for cautious optimism.

“The exit [from lockdown] still looks more than likely to be bumpy, across regions and industries,” he said. “But it appears less likely that the legacy of lockdowns will be a weak job market.”

The market was already well on its way to its first gain in four sessions, thanks to a broadly positive night in the US. The S&P 500 firmed 0.3 per cent as investors took in their stride news the Federal Reserve may start to reduce support for the economy as soon as next month.

Growth stocks and bond proxies advanced as the US dollar and long-term interest rates declined. The falling dollar boosted commodity prices and mining stocks.

Winners’ circle

The tech sector bounced 4.1 per cent as a decline in long-term interest rates from a six-month high lifted growth stocks. The Australian ten-year yield fell 5.5 points to 1.644 per cent. WiseTech put on 7.17 per cent, Megaport 6.82 per cent, Appen 6.15 per cent, Xero 5.28 per cent and Afterpay 4.48 per cent.

Mining stocks rallied after overseas buyers took advantage of US dollar weakness in commodities. Newcrest rose 2.44 per cent, BHP 0.56 per cent, Rio Tinto 1.15 per cent and Fortescue Metals 2.29 per cent.

Diversified miner South32 surged 4.93 per cent to a three-year high on plans to acquire a 45 per cent stake in a Chilean copper mine. The BHP spin-off will pay US$1.55 billion initially for Sumitomo Metal’s interest in the Sierra Gorda mine. Further payments will be contingent on production.

Netwealth was the session’s big winner, soaring 15.61 per cent after the wealth manager upgraded its outlook off the back of a record quarter. Funds under administration jumped $4.8 billion or 10.2 per cent in Q1. The company increased its net inflow guidance for FY2022 to $12.5 billion.

Virtus Health edged up 0.55 per cent despite news the competition regulator opposes its proposed acquisition of Adora Fertility and three day clinics from Healius. The ACCC informed Virtus they intend to seek an interim court order to prevent the acquisition going ahead. Virtus said it will defend any proceedings.

Online cosmetics retailer Adore Beauty increased revenue by 25 per cent over the first quarter from the same period last year. Active customers increased by 24 per cent to 874,000. The share price firmed 1.42 per cent.

Blackmores overcame news of tensions in the boardroom to climb 1.1 per cent. The board took the unusual step of issuing a statement seeking shareholder support for sitting directors at the upcoming AGM and asking shareholders to reject the candidacy of George Tambassis. Mr Tambassis has the support of company founder and former chair Marcus Blackmore, who left last year after relations with the board became “strained”.

Doghouse

The energy sector took a breather after US crude declined for the first time in five sessions. Santos eased 1.34 per cent, Woodside 1.23 per cent and Oil Search 0.66 per cent.

Falling interest rates dragged on most of the banks. Macquarie Group slid 0.61 per cent, ANZ 0.72 per cent, CBA 1.27 per cent and Westpac 0.12 per cent. NAB gained 0.14 per cent.

Declines in most of its key metrics sent online marketplace Redbubble down 12.5 per cent. Revenues fell 28 per cent over the first quarter, gross transaction value 21 per cent and gross profit 34 per cent. Despite the headline numbers, the company said its underlying performance improved and the results were in line with expectations.

Collins Foods dipped 0.32 per cent from an all-time high after expanding its footprint in the Netherlands. A subsidiary acquired nine KFC restaurants to add to the 35 the company already controls under a corporate franchise agreement.

Whitehaven Coal eased 2.12 per cent despite declaring it expects to be debt-free by the March quarter. Record thermal coal prices will allow the miner to pay down its senior debt facility early next year. The company reaffirmed its production and sales guidance.

Other markets

US futures remained buoyant. S&P 500 futures improved 15 points or 0.33 per cent. In Asia, the Dow gained 0.32 per cent, Japan’s Nikkei 1.2 per cent and China’s Shanghai Composite 0.15 per cent.

Oil more than recouped last night’s loss. Brent crude bounced 57 US cents or 0.7 per cent to US$83.75 a barrel.

Gold trimmed a 2 per cent overnight rally, falling US$3.20 or 0.2 per cent to US$1,791.50 an ounce.

The dollar held its ground near its highest in a month, inching up 0.06 per cent to 73.87 US cents.

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