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A reinvigorated share market hit its highest level in a week amid signs Wall Street’s inflation tantrum was passing.

The S&P/ASX 200 reached 6857 before finishing 56 points or 0.83 per cent ahead at 6834, reversing yesterday’s most of yesterday’s loss.

The energy, mining and healthcare sectors led the advance. Tech stocks rebounded from a six-week low. The battered travel sector continued a week of healing following optimistic outlooks from Qantas and Flight Centre.

What moved the market

US stocks climbed overnight after the Federal Reserve soothed fears a surge in bond yields heralded an end to the era of cheap debt. Chair Jerome Powell said it might take more than three years for inflation to reach the Fed’s target.

Investors piled back into the market, lifting the Dow 1.35 per cent to a new high. The broader S&P 500 gained 1.14 per cent and the Nasdaq 0.99 per cent.

“With the market beginning to digest the recent back up in yields and Fed policy on autopilot, it still feels like any significant pullback on the Index will run into ‘buy the dip’ mode,” Stephen Innes, Chief Global Market Strategist at Axi, said.

Australian miners reversed most of yesterday’s losses. The energy sector hit a four-week peak after crude added to a 13-month high. The tech sector rose for the first time in five sessions but struggled to hold its gains.

Investors kept a wary eye on the dollar, which touched a three-year high at 79.73 US cents before easing 0.1 per cent to 79.68 cents.

Winners’ circle

BHP led a strong advance in the resources space, advancing 3.3 per cent back towards Tuesday’s record high. Fortescue Metals put on 3.1 per cent and Rio Tinto 1.9 per cent. Energy giant Woodside gained 2.7 per cent following crude’s latest milestone.

Elsewhere at the big end of the market, Woolworths gained 1.5 per cent, Telstra 1.3 per cent, CSL 0.9 per cent and Coles 0.2 per cent. Gains in the big four banks ranged from 0.5 per cent for ANZ up to 1.3 per cent for Westpac.

Qantas climbed 1.8 per cent as CEO Alan Joyce talked up the improving outlook for a “redesigned” airline after reporting a $1.47 billion statutory pre-tax loss. Joyce described the figures as “stark” but unsurprising after border closures cut international travel by “virtually 100 per cent” and domestic flying by 70 per cent. The airline was planning for international travel to resume at the end of October as the vaccine rollout completes.

Flight Centre soared 8.9 per cent as the travel agent emphasised cost reductions and signs of recovery. The company reported an underlying pre-tax loss of $247.2 million for the half year. Rival Webjet put on 4.4 per cent.   

Surgical backlogs and latent demand are expected to fuel a recovery at Ramsay Health Care after a Covid-induced slump in profits. Statutory net profit declined 12.5 per cent last half as revenue fell 6.6 per cent. The share price bounced 7.7 per cent.

Bravura Solutions was the session’s best tech performer, rising 8.2 per cent from a near three-year low after hitting its half-year guidance. The fintech’s share price has been under pressure as Covid lengthened the sales cycle.

An increased dividend and a 78 per cent hike in net profit lifted Sandfire Resources 11.1 per cent to a 15-month high. The company lifted its interim dividend to eight cents per share from five cents this time last year.

Other companies to advance following earning updates included Polynovo +4.1 per cent and Janus Henderson +3.4 per cent.

Doghouse

A2 Milk Company plunged 16.2 per cent to its lowest level since October 2018 after unveiling the impact of the collapse of its Chinese reseller market during the pandemic. Half-year revenues slumped 16 per cent and earnings 32.2 per cent as cross-border e-commerce dried up.

Service Stream provided the session’s other major loss, tumbling 21.4 per cent. The network maintenance firm reported a decline in telecom earnings after completing two-year agreements with Telstra and nbn.  

The buoyant market mood ensured heavyweight losses were minimal. Transurban eased 2.2 per cent following last night’s year high in US bond yields. Gold miner Newcrest slid 2.5 per cent. Aristocrat Leisure shed 1.6 per cent, Macquarie Group 1.1 per cent and Brambles almost 0.1 per cent.

A 9 per cent decline in half-year profit dragged gold miner Regis Resources down 7.9 per cent. The company cut its interim dividend by 50 per cent to 4 cents.

Afterpay entered a trading halt while it tapped investors for $1.25 billion to increase its stake in its US operation. The BNPL leader more than doubled underlying sales over the first half to $9.8 billion. Earnings increased 521 per cent to $47.9 million.  Rival Z1P Co slumped 7.7 per cent despite reporting record revenue of $160 million and record transaction volumes.

Losses among companies trading without their dividends included Super Retail Group -3.5 per cent, JB Hi-Fi -3.8 per cent and Breville Group -1.7 per cent.

Other markets

Asian markets recouped yesterday’s falls. The Asia Dow bounced 2.07 per cent. China’s Shanghai Composite added 1.07 per cent, Hong Kong’s Hang Seng 2.15 per cent and Japan’s Nikkei 1.56 per cent.

Rising US futures hinted at potential gains tonight. S&P 500 futures climbed nine points or 0.2 per cent.

Oil eased from a 13-month high. Brent crude dipped two cents or less than 0.1 per cent to $US66.16 a barrel. Gold faded 90 cents or less than 0.1 per cent to $US1,797 an ounce.

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