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Aussie shares rebounded but failed to avert a third straight losing month as the market’s lacklustre end to a strong year continued.

Heavy institutional selling in the closing auction slashed the S&P/ASX 200‘s 50-point gain late in the session to a slim 16 points or 0.22 per cent. The Australian benchmark finished 68 points or 0.9 per cent lower for the month.

Gains in BHP, Macquarie Group and Telstra helped keep the index above water at the close. Defensive pockets of the market declined, including utilities and gold miners.

What moved the market

The three-month losing run since September is the longest since a four-session streak in the second half of 2018. The ASX 200 peaked at a record 7632.8 in mid-August and has since drifted down more than 370 points as lockdowns and dividend season took a toll.

The Omicron outbreak was the final nail this month. The index hit an eight-week low yesterday, but bounced today in line with a recovery on overseas markets. The market pared a 93-point mid-session tally as Asian markets and US futures trimmed their rise.

Overnight, US stocks reversed most of Friday’s brutal fall after President Joe Biden doused fears of renewed lockdowns to contain the new Covid strain. The S&P 500 bounced 1.32 per cent, regaining more than half of Friday’s loss.

“Cautious optimism that the Omicron covid-19 variant will prove not to be as serious as delta is the driver of these moves, but cautious is the operative word here,” NAB Head of FX Strategy Ray Attrill said.

US futures hinted at further gains tonight. S&P 500 futures rose five points or 0.1 per cent.

Back home, the Federal Government postponed the reopening of the border to international travellers for two weeks, while simultaneously talking down the threat from the virus.

“Our overwhelming view is that while it’s an emerging variant, it’s a manageable variant,” Health Minister Greg Hunt said.

A record current account surplus soothed concerns about tomorrow’s quarterly GDP report. The surplus increased by $1 billion to $23.9 billion. The Australian Bureau of Statistics said the surplus was driven by strong prices for coal and increased agricultural exports.

Back home, a flurry of deal making underlined corporate confidence in the economic outlook. Credit Corp announced it will buy Radio Rentals from Thorn Group. GUD scooped up AutoPacific Group. Seven West Media will inject $10 million into Raiz (more on all below). 

Winners’ circle

AMP bounced 2.99 per cent from a two-month low after outlining plans to revitalise the business through a demerger and a greater focus on growth. The investment manager will split into two companies in the first half of next year. AMP Ltd will service retail customers, while a Private Markets business will focus on international institutional clients.

A production upgrade at today’s AGM lifted lithium miner Orocobre 7.92 per cent. The miner expects to produce 210-220 kt of spodumene concentrate this calendar year.

Credit Corp and Thorn Group both rallied on news Credit Corp will buy Thorn’s Radio Rentals appliance leasing business for $60 million. Credit Corp shares jumped 8.57 per cent after the firm also upgraded its earnings guidance. Thorn gained 10.87 per cent.

A strong recovery in its European business lifted Collins Foods 12.62 per cent. The fast food company boosted first-half revenues by 8.5 per cent and earnings by 10 per cent. Revenue and earnings at the company’s KFC Europe business reached pre-pandemic levels.  

A rebound in court cases helped lift litigation funder Omni Bridgeway 6.56 per cent. Managing Director Andrew Saker told today’s AGM completed cases over the eight months to November had generated income of $83 million, versus $19 million over the 12 months to the end of March.

Raiz jumped 13.21 per cent on news Seven West Media will take a 6.6 per cent stake in the mobile financial services platform via a $10 million share placement. Seven West Media climbed 1.64 per cent.  

A broker upgrade helped lift Lynas Rare Earths 4.35 per cent. Barrenjoey raised its rating to ‘Overweight’.

Doghouse

Westpac sank 1.91 per cent after striking a deal with the regulator to pay $113 million to settle a slew of lawsuits. The six lawsuits covered a range of matters, including charging dead customers for advice and issuing duplicate insurance policies without customer consent. CEO Peter King said the bank fell short of its standards and had worked with ASIC to put things right.

CBA eased 0.64 per cent during a mixed session for the banks. ANZ gained 0.3 per cent and NAB 0.37 per cent. Macquarie Group climbed 1.41 per cent after raising $1.3 billion from retail investors.

Nuix sagged 11.72 per cent to a four-month low on news of higher costs and zero growth in contract values over the first four months of the financial year. CEO Rod Vawdrey said revenues had improved, but annualised contract value was flat. The cost base increased “materially” due to product development, higher employee costs and legal actions.

The session’s biggest drags included St Barbara -4.26 per cent, Cochlear -3.91 per cent, Fortescue Metals -3.35 per cent and BlueScope Steel -2.75 per cent.

Swimming pool and car parts company GUD entered a trading halt to raise funds to acquire AutoPacific Group. GUD will pay $744.6 million to buy the trailer and 4WD accessory manufacturer from private equity investor Pacific Equity Partners. The purchase will be funded through a $405 million equity raising and the issue of new shares to the vendors.

Biome Australia continued a recent run of disappointing market debuts. Shares in the probiotics and alternative health business dived 40 per cent to 12 cents.

Other markets

Most Asian markets followed Wall Street higher, but trimmed gains as the session advanced. The Asia Dow tacked on 0.26 per cent, China’s Shanghai Composite 0.23 per cent and Japan’s Nikkei 0.46 per cent. Hong Kong’s Hang Seng fell 1.09 per cent.

Oil firmed for a second session. Brent crude put on 44 US cents or 0.6 per cent at US$73.66 a barrel.

Gold rose US$5.80 or 0.3 per cent to US$1,788.10 an ounce.

The dollar dipped 0.03 per cent to 71.43 US cents.

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