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The share market ended a volatile month on a strong note, advancing for a second day ahead of a likely rate rise next week.

The S&P/ASX 200 climbed 78 points or 1.06 per cent. The rally trimmed the benchmark’s loss for the month to 65 points or almost 0.9 per cent.

The index came within eight points of an all-time high as recently as last week before crumbling on either side of the Anzac Day long weekend. The mood on global markets deteriorated in the face of inflationary pressures, looming rate hikes, Covid lockdowns in China and the war in Ukraine.

Tech stocks outperformed this session, in line with overnight action in the US. The healthcare sector was held back by disappointing updates from ResMed and Ramsay.

What moved the market

All 11 sectors rose as a strong rebound on Wall Street encouraged investors to ignore a slump in US futures and the prospect of a rate rise on Tuesday. Overnight, the Nasdaq composite bounced 3.06 per cent as a trading update from Facebook owner Meta Platforms surpassed low expectations. The S&P 500 put on 2.47 per cent.

“The major Wall Street indices jumped last night as investors cheered a better-than-expected earnings report from Facebook parent Meta Platforms while piling into technology stocks. Facebook’s return to user growth eased concerns around the toll of competition from younger sites like TikTok. Meanwhile, its solid earnings report exhibited resilience amidst a rising inflation environment,” Kunal Sawhney, chief executive of research group Kalkine, said.

A Reuters poll of economists showed a majority expect the Reserve Bank to raise the cash rate on Tuesday. The median forecast among the 32 polled was for a 15 basis-point increase to 0.25 per cent.

Quarterly wholesale inflation data this morning added to the case for higher rates.

Producer prices rose at their fastest quarterly and annualised pace since 2008, clearly moving in lockstep with consumer prices which also reached multi-year highs earlier this week,” City Index senior market analyst Matt Simpson said.

“The only reason the RBA have to not hike next week is that the federal elections are set for a few weeks. And that means the money market’s interbank cash rate is only placing in around a 60% chance of said hike.

“We think the 1-month OIS (overnight index swap) is more realistic at an 86% chance of a hike. We’re bracing ourselves for a 15-bps hike on Tuesday, which will be RBA’s first in over a decade.”

The dollar has been under pressure all week from a rising greenback and worries export-driven economies will struggle as Chinese demand wilts under lockdown. The Aussie bounced 0.57 per cent this afternoon to 71.49 US cents.

The market retained most of its initial gains in the face of a sharp deterioration in US equity futures. Nasdaq futures slumped 0.7 per cent following poorly-received after-market trading updates from Apple and Amazon. S&P 500 futures fell 0.36 per cent.

Apple shares slid 2.22 per cent in extended trade after the company warned of supply-chain cost pressures. Amazon‘s firstly quarterly loss in seven years sent the share price down 9.02 per cent.

Winners’ circle

Growth stocks provided most of the day’s best performers. PointsBet gained 10.7 per cent, Telix Pharmaceuticals 9.24 per cent and Zip Co 7.88 per cent. Tyro Payments added 6.36 per cent, EML Payments 4.92 per cent and Life360 5.77 per cent.

Miners also featured. Nickel Mines rose 7.35 per cent. Uranium miner Paladin gained 6.49 per cent. Lithium miners Pilbara Minerals and Allkem added 5.95 and 4.08 per cent, respectively.

Eighteen of the 20 market leaders of the ASX 20 index advanced. Gains ranged from 0.03 per cent (Rio Tinto) up to 4.21 per cent for Aristocrat Leisure. Goodman put on 2.09 per cent, James Hardie 3.38 per cent and CSL 1.66 per cent.

ANZ announced it will take a charge of $43 million against its first-half result to account for divestments, business closures and taxes. The share price improved 0.78 per cent.

Gas and oil giants Woodside and Santos gained 0.84 and 1.27 per cent, respectively. Beach Energy firmed 2.52 per cent.

Improving energy prices helped propel Origin Energy up 1.92 per cent to a pandemic-era high. The company said revenues from gas last quarter were more than double last financial year. Electricity sales volumes were 7 per cent higher than the same time last year.

Rival AGL climbed 2.24 per cent.

Doghouse

Margin pressure, supply-chain issues and increased costs marred ResMed‘s trading update. The sleep apnea specialist boosted revenues by 12 per cent and operating profit by 5 per cent last quarter. The share price fell 4.08 per cent on news margins contracted, chip shortages will dent full-year revenues and expenses increased by 21.1 per cent.

Takeover target Ramsay Health Care eased 0.54 per cent on a Covid-fuelled slump in profit. Unaudited net profit dropped 38.9 per cent to $201.6 million across the nine months to the end of March. Managing Director Craig McNally said the private-hospital business saw “significant levels of disruption in the business due to high rates of COVID in the community”.

Kogan skidded 13.88 per cent to a two-year low on confirmation a Covid-fuelled boom in online shopping continued to fade. The retailer’s gross sales declined 3.8 per cent to $262.1 million last quarter. Shares that traded as high as $25.57 in 2020 hit $3.95 this morning.

Other markets

Asian markets gathered momentum in afternoon trade. The Asia Dow climbed 1.53 per cent, China’s Shanghai Composite 1.95 per cent, Japan’s Nikkei 1.75 per cent and Hong Kong’s Hang Seng 3.08 per cent.

Gold climbed further from a two-month low as the US dollar weakened. The yellow metal rallied US$17.40 or 0.9 per cent to US$1,908.70 an ounce.

Oil added to overnight gains. Brent crude firmed US$1.06 or 1 per cent to US$108.32 a barrel.

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