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A rebound session helped Aussie shares inch higher for the week as positive US leads and the announcement of a national pandemic plan offset a jump in coronavirus case numbers.

The S&P/ASX 200 rallied 43 points or 0.59 per cent.

The market recouped just enough of yesterday’s loss to avert a second straight losing week. The index finished six-tenths of a point or less than 0.1 per cent ahead after a week dominated by Covid lockdowns and end-of-financial-year rebalancing.

Energy companies and most of the banks rose. Newcrest, Coles, Afterpay and Rio Tinto were among the drags.

What moved the market

The market hit its high early in the session on the back of strong US leads, and touched its low after NSW reported an increase in Covid-19 cases. The S&P 500 provided a platform for the early advance with a sixth straight record close. The broadest of the three major US indices climbed 0.52 per cent to secure its longest winning run since February.

The index temporarily trimmed its advance after New South Wales reported 31 new local Covid-19 cases in the 24 hours to 8pm last night, up from 24 the previous day. Premier Gladys Berejiklian said health authorities expected case numbers might go higher before falling.

The National Cabinet released a four-phase plan for managing the pandemic. The first phase includes cutting arrivals by half to relieve pressure on the hotel quarantine system. Home quarantine will be trialled for vaccinated arrivals.

Later phases will include increased arrival caps, including students and tourists, the option for vaccinated people to travel abroad and eventually a return to pre-pandemic living. Each phase will be triggered when the nation achieves a certain number of vaccinations.

The start of a new financial year and the announcement of the new national plan should spur investors to consider where to allocate funds, Kalkine Group CEO Kunal Sawhney said.

“The battery metal mining industry, which has been moderately disrupted by the pandemic so far, seems well-positioned to resume its pace of growth this year on the back of increased uptake of electric vehicles,” he said.

“The travel and tourism sector may also gradually recover following the eventual completion of the vaccination programme, potentially convincing the government to open its international borders. However, controlling Delta variant spread and eliminating vaccine hesitancy seems crucial to spur the vaccination progress.

“With around half of the Australian population currently in lockdown amid a resurgence of virus cases, the stay at home trend is back in the market, painting a bullish picture for tech darlings, BNPL and e-commerce players.

“However, it will be interesting to see whether stay at home stocks will be able to sustain their momentum when COVID-19 restrictions eventually loosen. The progress in the COVID-19 vaccination program and tightened grip on the Delta variant will also play an instrumental role here.”

Winners’ circle

Energy was this session’s standout sector, rising 1.76 per cent after a stand-off threatened to disrupt expected increases in crude production. Brent crude settled US$1.22 or 1.6 per cent higher at US$75.84 a barrel overnight after the OPEC+ cartel was unable to agree on raising output.

The group will meet again tonight after the United Arab Emirates reportedly baulked at plans to increase production by 400,000 barrels a day each month to a total of an additional two million barrels each day by the end of the year.  

Woodside Petroleum rallied 3.01 per cent, Santos 1.13 per cent and Oil Search 1.31 per cent.

The big banks provided much of the early momentum. ANZ climbed 1.03 per cent, CBA 0.8 per cent and NAB 0.73 per cent. Macquarie Group gained 1.41 per cent.

A double dose of bad news pulled Westpac down 0.04 per cent. The bank announced proceedings against a finance company after discovering a “significant potential fraud”. No customers were affected, but the bank had exposure of around $200 million after tax.

The bank also announced it will recompense former clients to the tune of $87 million for failing to inform them about buybacks, share purchase plans and other corporate actions. The payments will affect roughly 32,000 customer accounts.

Insurers were in the spotlight. Suncorp announced it will sell its 50 per cent stake in RACT Insurance to its joint venture partner, the Royal Automobile Club of Tasmania (RACT). The company expects a pre-tax profit of $65-$70 million. The share price climbed 1.18 per cent.

QBE eased 0.56 per cent after revealing the company faces a class action alleging wrongful denial of business interruption cover during the pandemic. The insurer said it would defend the action.

Student placement service IDP Education was the session’s standout, surging 20.31 per cent on news it will acquire the British Council’s Indian English language testing system (IELTS). The transaction will remove a major rival, cementing IDP’s market leadership. IDP will pay £130 million.

Chalice Mining put on 1.86 per cent following results from its Julimar deposit in WA. Nuix continued to recover from Wednesday’s record low, rising 4.29 per cent. A2 Milk gained 5.16 per cent, Nickel Mines 5 per cent and Webjet 4.92 per cent.

Doghouse

Most of the big miners dipped as yesterday’s soft Chinese factory report crimped buying interest. Rio Tinto fell 0.22 per cent. Fortescue Metals dropped 0.04 per cent. BHP bucked the trend, rising 0.68 per cent. Gold miner Newcrest slid 1.71 per cent despite a second straight rise in the yellow metal overnight.

Coles lost 0.65 per cent and Goodman 0.29 per cent.

The recent recovery in tech stocks seems to have run out of momentum. The sector eased 0.11 per cent to its fourth loss in six sessions and a two-week low. Afterpay fell 0.64 per cent, Megaport 4.37 per cent, Appen 1.38 per cent and Iress 1.24 per cent.

Other markets

Asian trade was subdued by falls in China and Hong Kong. The Shanghai Composite and Hang Seng both sank 1.73 per cent. The Asia Dow faded 0.05 per cent. Japan’s Nikkei improved 0.24 per cent.

US futures were flat. S&P 500 futures inched up a point or 0.02 per cent. Nasdaq futures dipped 0.2 per cent.

Oil gave up early gains. Brent crude eased four cents or 0.05 per cent to US$75.82 a barrel.

Gold gained $2.50 or 0.14 per cent at US$1,779.30 an ounce.

The dollar hovered near its weakest level since December. The Aussie inched up 0.04 per cent to 74.68 US cents.

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