The share market managed a third straight gain but closed off session highs as investors reduced exposure in the last full trading session before the Christmas break.
The S&P/ASX 200 finished with a rise of 23 points or 0.3 per cent after earlier putting on as much as 39 points.
Gains in banks, gold miners and REITs outweighed weakness in iron ore producers and tech stocks. Graphite miner Syrah Resources was the session’s standout after signing a deal to supply electric car maker Tesla.
The market opens for a holiday-shortened session tomorrow, then closes for four days. The New York Stock Exchange shuts tomorrow night for Christmas, but trades twice next week before the ASX reopens on Wednesday.
What moved the market
Investors found enough in positive overnight leads to offset record Covid case numbers at home. The ASX 200 traded above 7400 for the first time in a week and a half before fading to 7388. This year’s “Santa rally” came late and has so far only returned the index to where it sat in the second week of the month.
US and European markets rose as US economic data and positive Covid developments helped settle market nerves. A South African study suggested omicron symptoms were milder than those of delta and other previous strains. Case numbers in South Africa declined. The US regulator granted Pfizer emergency use authorisation for a pill for treating Covid.
“Omicron news are lifting sentiment, encouraging markets to price a less malicious outcome from the new virus wave,” NAB currency strategist Rodrigo Catril said.
“Omicron is and will continue to have an impact on the global economy, but now there is prospect that its impact could be shorter and shallower. Favouring a positive outlook for 2022 with consumers and corporates well placed to support the economy next year, amid high levels of savings and employment.”
The S&P 500 climbed 1.02 per cent. The pan-European Stoxx 600 added 0.92 per cent.
Overseas news helped offset negative developments at home. New South Wales reported a record 5,715 new cases this morning. Queensland also reported a state record of 369 new cases. Victoria passed 2,000 new cases for the first time since October.
An offtake agreement with Tesla lifted graphite miner Syrah 23.02 per cent to a near two-year high. The miner will supply the electric car maker with natural graphite Active Anode Material from its US facility. The agreement has an initial term of four years.
Beleaguered Magellan bounced 5.17 per cent as co-founder and Executive Chair Hamish Douglass reassured investors the fund manager’s future was healthy. Douglass posted a video interview addressing the resignation of CEO Dr Brett Cairns and the loss of a key mandate.
The best of the market heavyweights were gold miner Newcrest +1.05 per cent and three of five leading banks. ANZ gained 0.62 per cent, NAB 0.6 per cent and Macquarie Group 0.59 per cent.
Other up-moves included Wesfarmers +0.5 per cent, Woodside +0.46 per cent and CSL +0.37 per cent.
Gold miners rallied after the yellow metal clambered back above US$1,800 an ounce. St Barbara added 4.33 per cent, Regis Resources 4.32 per cent and Evolution 2.26 per cent.
Casino group SkyCity Entertainment firmed 2.46 per cent after investing $39.3 million in a strategic partner’s acquisition of a European business-to-business online sports provider.
Xero eased 0.79 per cent after announcing it will acquire Canadian tax preparation software company TaxCycle for $81 million. The accounting software firm said the deal would provide immediate access to an established Canadian customer base. The acquisition will be funded by a mix of cash (71%) and equity (29%).
Bega Cheese dived 10.32 per cent after warning of cost pressures and competition for milk supply. Despite the headwinds, the dairy producer expects earnings to improve this financial year to $195-$215 million from $142 million in FY21.
“Farm milk supply across the Australian dairy industry remains flat to declining with strong competition for supply continuing. The company expects upward pressure on farm gate milk prices to remain for the balance of the year,” the firm told the ASX.
WiseTech backed down 2.57 per cent from an all-time high on news founder and CEO Richard White will sell 4.3 million shares. The sell-down through Macquarie Bank will start early next year and take around six months. White will retain a 42 per cent interest in the software maker.
Booktopia dropped 14.02 per cent to a record low on news first-half earnings will be impacted by a range of additional costs. The company incurred extra labour costs during the Sydney lockdown and added a second distribution facility.
Prang of the day was oil explorer FAR Ltd, whose shares shed almost half of their value after drilling off The Gambia coast came up empty. The Bambo well reached 3,317 metres without encountering anything more than “oil shows”. The share price dived 48.65 per cent as speculators exited.
The last few IPOs of the year have brought little festive joy. Black Mountain Energy skidded 27.5 per cent upon listing today. Rubix Resources eased 15 per cent.
The falls continued a recent run of disappointments. Three of yesterday’s four debutants finished below their offer prices. Infinity Mining and DMC Mining both closed at 15.5 cents (IPO price: 20c). Falcon Metals ended at 37.5 cents (IPO price: 50c).
The exception was tech consultancy firm Atturra, which ended at 62 cents (IPO price: 50c).
Asian markets logged modest gains. The Asia Dow put on 0.75 per cent, China’s Shanghai Composite 0.13 per cent, Japan’s Nikkei 0.47 per cent and Hong Kong’s Hang Seng 0.16 per cent.
US futures were tentatively positive. S&P 500 futures inched up three points or 0.07 per cent.
The bull run in oil continued. Brent crude firmed 15 US cents or 0.2 per cent to US$75.43 a barrel after rising 1.8 per cent overnight.
Gold climbed US$5.10 or 0.3 per cent to US$1,807.30 an ounce.
The dollar trimmed overnight gains, lately down 0.04 per cent to 72.09 US cents.