Record highs for the nation's largest iron ore miners propelled the share market back into positive territory for the week following yesterday's setback.
The S&P/ASX 200 rebounded 38 points or 0.52 per cent, recouping more than half of yesterday's reversal. The rally placed the index 23 points ahead for the week.
Record results from Rio Tinto and Fortescue Metals helped lift the big three bulk metal giants to fresh peaks. The tech sector reversed off a seven-week low as bond yields tested levels last seen in February. Notable declines included NAB, Westpac, the supermarkets and Wesfarmers.
What moved the market
Investors can thank the rivers of gold flowing from China for the share market's ability to rally through the interminable NSW lockdown. Fortescue Metals joined BHP and Rio Tinto at all-time highs following a record fourth quarter.
The miner shipped 49.3 million tonnes of iron ore during the last three months of the financial year, ensuring it beat its full-year production guidance. Revenues were also a record, averaging US$168 per dry metric tonne. The share price climbed 1.9 per cent.
Rio Tinto reported a record first-half profit of US$12.1 billion late yesterday. The miner declared it will return three-quarters of underlying earnings to shareholders. Shares in the company gained 1.47 per cent. BHP climbed 1.64 per cent.
Technology was the day's other standout as the threat of a months-long lockdown in NSW drove traders back to last year's best-performing sector. The NSW government today announced tighter restrictions for hot-spots after the state recorded 239 new local cases, the highest single-day tally of the current outbreak.
"Lockdown in parts of Australia appears to be shaping up a promising scenario for tech firms, bolstering the likelihood of behavioural transitions to a digital-first world," Kalkine Group CEO Kunal Sawhney said. "The return of the stay-at-home trends in the market is painting a bullish picture for tech darlings and e-commerce stocks."
Today's tech rally mirrored overnight action in the US, where the Nasdaq outperformed in a mixed market. The Nasdaq Composite put on 0.7 per cent. The Dow shed 0.37 per cent. The S&P 500 finished flat.
"The tech-laden Nasdaq Composite rallied as investors weighed record earnings from technology giants and digested the Federal Reserve’s decision to retain accommodative monetary policies," Mr Sawhney said.
"Investors were largely upbeat after the Federal Reserve reiterated that the economic recovery is moving on track despite the threat posed by the Delta mutant of the Covid-19 virus. While the central bank hinted that it was getting closer to curtailing a key asset-purchasing program, it offered little specificity on when stimulus support will be reduced," he added.
A strong session for tech stocks saw Altium climb 4.03 per cent, Megaport 4.66 per cent and Nanosonics 3.93 per cent. BNPL leaders Afterpay and Z1P Co put on 3.08 and 5.79 per cent, respectively.
Iress flew up 13.91 per cent after the maker of trading software knocked back a takeover offer and launched a share buyback. The company said EQT Fund Management's revised non-binding unsolicited offer of $15.30 - $15.50 "did not represent compelling value for Iress shareholders". Discussions would continue. Meantime, Iress will buy back up $100 million of its shares.
A cautious outlook capped gains in Macquarie Group as the company held its AGM. The investment bank said trading conditions had improved this quarter but "we continue to maintain a cautious stance, with a conservative approach to capital, funding and liquidity". The share price edged up 0.29 per cent.
Notable gains at the heavyweight end included Newcrest +0.88 per cent, Woodside +0.32 per cent and CSL +0.51 per cent.
A record quarter lifted gold miner Regis 5.65 per cent. Managing Director Jim Beyer said the new financial year would see a material step up in scale.
Wesfarmers eased 0.19 per cent after takeover target Australian Pharmaceutical Industries (API) rejected the retail conglomerate's unsolicited offer. The API board said the offer price of $1.38 per share undervalued the company and was not in the best interest of shareholders. The timing of the bid was "opportunistic" while the share price was depressed by lockdown restrictions. API shares inched up 2.13 per cent to $1.44, suggesting traders anticipate an improved offer.
A subdued session for the banks saw ANZ edge up 0.04 per cent and CBA add 0.15 per cent, while NAB dropped 0.54 per cent and Westpac lost 0.16 per cent.
A 10 per cent decline in quarterly production helped drag Resolute Mining down 7.08 per cent. The gold miner attributed the fall to power disruptions, maintenance stoppages and lower grades.
Asian markets rebounded after Chinese state-run media tried to dampen jitters following several days of heavy falls. The Shanghai Composite rallied 1.51 per cent. Hong Kong's Hang Seng gained 3.03 per cent. Japan's Nikkei added 0.7 per cent and the Asia Dow 1.5 per cent.
A disappointing after-market update from Facebook kept a lid on US futures. S&P 500 futures dropped two points or 0.05 per cent. Nasdaq futures declined almost 0.2 per cent.
Oil built on an overnight two-week high. Brent crude rose 38 US cents or 0.5 per cent to US$74.25 a barrel.
Gold added to this morning's post-Fed rally. The yellow metal advanced US$16.50 or 0.92 per cent to US$1,816.20 an ounce.
The dollar reversed early weakness, rising 0.07 per cent to 73.82 US cents.