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The share market fell for a fifth session as strong jobs data increased pressure for higher interest rates.

The S&P/ASX 200 finished 10 points or 0.15 per cent lower after earlier gaining as much as 71 points. The market rolled over after unexpectedly robust employment data suggested recent rate hikes have yet to slow hiring.   

The heavily-weighted financial sector fell for an eighth straight session since last week’s interest rate rise. Supermarkets, utilities and healthcare companies also declined. REITS and miners rebounded.

What moved the market

A strong reversal in the US overnight failed to convert into gains here as traders faded the rally. Selling commenced within the first hour and accelerated after the Australian Bureau of Statistics reported the economy added 61,000 jobs last month. The increase in employment  was more than twice as large as economists expected.

Economists at ANZ, CBA and VanEck said the report firmed up the argument for another 50 basis-point increase to the cash rate next month. RBC Capital Markets strategist Robert Thompson went further.  

“We now expect the RBA to deliver 50bp hikes in each of the July, August and September meetings, reaching a cash rate of 2.35 per cent,” Thompson said.

The mood on regional markets and US equity futures steadily soured amid fragile investor sentiment after more than a week of constant selling pressure. The ASX 200 has fallen more than 600 points since last Tuesday.

The Asia Dow cut its initial advance to 0.1 per cent. Japan’s Nikkei slashed its rise to 0.54 per cent. Hong Kong’s Hang Seng fell 1.45 per cent. China’s Shanghai Composite faded 0.59 per cent.

US futures turned negative in afternoon trade. S&P 500 futures rolled over to a loss of 14 points or 0.38 per cent.

Clifford Bennett, chief economist at ACY Securities, said investors should use rallies to reduce their exposure to a looming recession.

“Investors should take advantage of the immediate market volatility, higher stocks and lower US dollar, to protect their portfolios on a medium to long term basis from the fast arriving freight train of recessions in the USA and other nations,” Bennett said. 

“The risks are very high. The next 1-3 days could see the best levels for investors to further hedge their portfolios. Selling stocks, buying the US dollar, as well as Gold and Oil.”

US stocks bounced overnight after the Federal Reserve hiked its benchmark rate by 75 basis points, the biggest increase since 1994. Investors responded by lifting the S&P 500 1.5 per cent to its first gain in six sessions.

Winners’ circle

The day’s best returns came from some of the past week’s worst performers. The real estate investment trust sector bounced 1.45 per cent off a 21-month low. The speculative end of the market as measured by the S&P/ASX Emerging Companies Index rose 1.07 per cent from its weakest level since May last year.

Property stocks temporarily shook off worries about the impact of higher borrowing costs on dividend yields. Charter Hall Retail gained 3.53 per cent. HomeCo Daily Needs bounced 2.9 per cent. Sector giant Goodman firmed 2.39 per cent.

Appen led a fleeting rebound in the beaten-down tech sector, rising 5.1 per cent. NextDC tacked on 3.78 per cent and WiseTech 1.76 per cent. In the BNPL space, Zip Co rallied 1 per cent. Afterpay owner Block bounced 1.49 per cent.

An infant formula supply agreement with US retail giant Walmart boosted Bubs shares by 7.08 per cent. Part of a second plane-load of formula sent under an emergency US scheme will go to 800 Walmart stores.

“The addition of Walmart will increase our bricks and mortar exposure in the United States over the coming days and weeks to around 4,800 stores across 35 States,” Bubs founder and CEO Kristy Carr said.

The Reject Shop jumped 18.95 per cent after reaffirming full-year guidance and reporting it was assessing an on-market share buyback. The discount retailer also announced former Officeworks executive Phil Bishop will join as CEO.

News of an on-market share buyback lifted Eagers Automotive 5.44 per cent. The car dealership announced it will buy back up to 10 per cent of issued share capital over 12 months from June 30.

Minnow GreenTech Metals requested a trading halt after the exchange operator sought more details about drilling results that lifted the share price 146.43 per cent. Earlier the stock soared on positive assay results from the miner’s Whundo copper-zinc project in WA. Trading was paused “pending clarification” of the original announcement.  

Doghouse

A fade session for the major banks dragged the market into negative territory. Westpac dropped 1.88 per cent, ANZ 0.42 per cent and CBA 0.17 per cent. NAB clung on to a gain of 0.11 per cent.

Traditional havens gave back some of this week’s gains. Inghams shed 4.44 per cent, AGL 3.73 per cent and Bega Cheese 3.78 per cent.

A double whammy of negative news drove Link Administration down 10.43 per cent. First, the competition regulator, the ACCC, said it had “significant preliminary competition concerns” about a takeover offer from Dye & Durham. Then Link’s UK subsidiary was hit with a lawsuit over the collapse of an equity income fund.

The board said it would defend the action and continued to unanimously recommend the proposed acquisition by Dye & Durham.

humm group shed 14.81 per cent as strong growth in its commercial arm failed to offset “significant” pressure on its consumer finance arm. Net receivables at Humm Commercial have risen by 70 per cent from this time last year. Net profit at Humm Consumer Finance has fallen 61 per cent.

Investment manager Australian Ethical faded 2.42 per cent after advising it expects to increase full-year underlying profit before performance fees by 9 per cent to between $9.8 and $10.2 million.

Engineering group Worley dipped 0.28 per cent after winning a ten-year contract to service Chevron’s onshore and offshore assets.

Other markets

Oil clawed back a portion of last night’s fall. Brent crude rose 42 US cents or 0.35 per cent to US$118.93 a barrel.

Gold trimmed a post-rate rise recovery. The yellow metal was lately up US$13.70 or 0.75 per cent at US$1,833.30 an ounce.

The dollar bounced 1.7 per cent overnight as the greenback backed off recent highs. The Aussie was this afternoon trading at 70.02 per cent after falling as low as 68.5 cents on Tuesday.

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