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Aussie shares started the week with solid gains as a US market holiday brought a reprieve from overseas selling pressures.

The S&P/ASX 200 climbed 73 points or 1.11 per cent to its first gain in four sessions. Buyers were encouraged by a rebound on Wall Street heading into the July 4 long weekend.

All 11 sectors rose, led by energy producers, gold miners and landlords.

What moved the market

A bright start to the second half of the year in the US gave Australian investors the confidence to look past a certain rate rise this week as economic data underlined the failure of recent hikes to slow a charging economy.

US stocks trimmed a losing week on Friday as a new quarter got underway. The New York Stock Exchange will be closed tonight, along with other US market operators.

“Friday’s US equity price action was about bargain hunters with the S&P 500 clawing its way back into positive territory, after opening the day lower,” NAB currency strategist Rodrigo Catril said. “The Dow rose 1.05% and the S&P 500 gained 1.06% while the Nasdaq added 0.90%.”

The Reserve Bank meets tomorrow and is widely expected to increase the cash rate target by 50 basis points to 1.35 per cent. Governor Philip Lowe said two weeks ago he expected the discussion to revolve around whether to lift by 25 or 50 points.

Job advertising and building approvals figures this morning underscored the strength of the inflationary pressures facing the central bank. Job ads jumped 1.4 per cent last month.

“Growth in demand for labour is still outpacing supply. ABS job vacancies rose 13.8 per cent q/q to a record high 480,100 in May, a much sharper increase than ANZ Job Ads over the same period,” ANZ senior economist Catherine Birch said.

Building approvals also surpassed expectations, rising 9.9 per cent. Home loans increased by 1.7 per cent.

“There were no signs of borrower angst in May in response to higher interest rates. Dwelling approvals and home loans lifted with renovation loans soaring to record highs. Activity levels across the construction sector remain high,” CommSec chief economist Craig James said.

The reports appeared to increase pressure on the RBA to raise rates tomorrow. Japanese financial services group Nomura expects Australia to enter a recession in the next year as surging interest rates cool global growth. The firm’s economists today predicted recessions for several major economies, including Australia, the US, UK, Japan, South Korea and Canada. Australia was seen as particularly at risk from a housing bust.

“Increasing signs that the world economy is entering a synchronized growth slowdown, meaning countries can no longer rely on a rebound in exports for growth, have also prompted us to forecast multiple recessions,” Rob Subbaraman and Si Ying Toh at Nomura said in a research note.  

Winners’ circle

Oil’s first advance in four sessions kept energy providers well bid. Santos put on 3.33 per cent. Woodside Energy gained 2.66 per cent.

Property was the other standout sector as a recent bond market rally pressured yields, increasing the relative appeal of REITs and other “bond proxies”. Ingenia Group put on 5.32 per cent, Cromwell Property 2.65 per cent and Centuria Industrial REIT 2.44 per cent.

Aside from Ingenia, the index’s best performers were biotech Imugene +12.82 per cent and coal miner New Hope +7.78 per cent.

A rebound in gold helped lift Silver Lake Resources 4.03 per cent, St Barbara 3.77 per cent and Perseus 3.75 per cent.

Home Consortium climbed 2.8 per cent after announcing a new unlisted wholesale fund targetting “superior risk-adjusted returns”. The HMC Capital Partners Fund 1 will invest in public and private companies with “real asset backing”.

Waypoint REIT rose 2.15 per cent after the valuation of its 404 fuel and convenience stores was upgraded by $139.5 million for the six months to June 30. The reappraisal adds approximately 19 cents to the trust’s net tangible assets per security.

Among the index heavyweights, James Hardie climbed 4.9 per cent, Wesfarmers 2.51 per cent and Goodman Group 2.8 per cent. The big four banks advanced between 0.8 and 1.3 per cent.

A storm update reassured investors in Suncorp as extreme rains caused extensive flooding on the east coast. Shares in the insurer rose 0.73 per cent on news claim volumes so far were low, but expected to increase. The company warned reinsurance premiums for FY23 had increased significantly due to “the hardening of the global reinsurance market”.

The announcement of new supply deals with two US chain stores lifted infant formula-maker Bubs 3.23 per cent. A fourth planeload of the firm’s formula is due to land in the US on Wednesday.

Doghouse

BHP fell 0.37 per cent in the wake of Friday’s heavy commodity falls. Lake Resources shed 3.29 per cent, Liontown 1 per cent and Champion Iron 0.76 per cent.

Link Administration eased 0.26 per cent after the board said it could not support a revised takeover offer from Dye & Durham. The Canadian software company reduced its initial offer from $5.50 to $4.30 per share. Link said the board “does not believe it is able to recommend a $4.30 per share transaction for control of Link Group”.

Gaming group PointsBet sank 6.25 per cent as its shares traded without the right to a bonus issue.

Struggling fund manager Magellan lost 9.92 per cent on news head of sales Frank Casarotti will exit the company. Rivals Pendal and Perpetual eased 2.46 and 3.25 per cent, respectively.

Other markets

A mixed session on Asian markets helped push US equity futures lower. The Asia Dow firmed 0.3 per cent. Japan’s Nikkei 225 index improved 0.8 per cent. China’s Shanghai Composite swung to an afternoon gain of 0.32 per cent. Hong Kong’s Hang Seng trimmed its loss to 0.26 per cent.

S&P 500 futures declined 20 points or 0.5 per cent ahead of tonight’s market holiday.

Brent crude climbed 39 US cents or 0.35 per cent to US$112.02 a barrel.

Gold rallied US$11.10 or 0.6 per cent to US$1,812.50 an ounce.

The dollar climbed 0.3 per cent to 68.32 US cents.

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