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The share market strung together back-to-back gains for the first time in three weeks, but finished well off session highs for a second day as tech stocks and miners weighed.

The S&P/ASX 200 surged as much as 70 points in early action before trimming its advance to 32 points or 0.47 per cent.

The fade mirrored yesterday’s action, when the index retained just 29 points from an initial 125-point surge. Investors have been reluctant to hold overnight following a run of extreme swings on Wall Street.

What moved the market

Gains in US value stocks and declines in US growth stocks laid the blueprint for today’s session. For the most part, the ASX stuck to the script: consumer stocks, financials and industrials rose; tech and speculative stocks fell.

Investment bank Macquarie Group hit an all-time high. Not all miners followed the script: BHP dropped 0.8 per cent and Fortescue Metals shed 0.1 per cent.

Strengthening US futures helped the local market shrug off a mid-session dip that briefly threatened to drag the index underwater. S&P 500 futures rallied 0.8 per cent by the Australian close. A drop in US bond yields encouraged bargain-hunters to lift Nasdaq futures 1.3 per cent. Overnight, the growth stock-heavy Nasdaq slumped 2.41 per cent into a technical correction.

The local market hit its peak after NAB’s monthly survey showed businesses were more confident about the future than any time in the last ten years. The confidence index climbed four points to 16 points, highest since 2010.

“This says the economy recovery has very strong momentum and even though government support is tapering, businesses are increasingly confident the economy will continue to improve,” Alan Oster, NAB Group Chief Economist, said.

Winners’ circle

The financial sector, which benefits from higher rates through margin opportunities, rallied almost 1 per cent to its strongest level in 13 months. ANZ climbed 1.3 per cent, NAB 0.8 per cent, Westpac 0.7 per cent and CBA 0.7 per cent.

Macquarie Group, which got a leg up from the greenback, put on 2.4 per cent. Other companies to get a tailwind from strength in the US dollar included Aristocrat Leisure +0.6 per cent, Transurban +2.3 per cent and CSL +1.7 per cent. Rio Tinto was the best of the major iron ore producers, edging up 0.1 per cent.

In the consumer space, Wesfarmers improved 1.2 per cent and Woolworths 0.2 per cent. Prime Media surged 11.9 per cent on news the CEO of Australian Community Media Antony Catalano had increased his stake in the group.

Vocus Group was the index’s best performer. The networks company jumped 8.6 per cent after agreeing to a takeover offer from a consortium headed by Macquarie Infrastructure.  

Travel and tourism stocks caught some of the halo effect from a jump in their US counterparts. Ardent Leisure climbed 12 per cent, Corporate Travel Management 7.5 per cent, Webjet 4.9 per cent, Qantas 2.4 per cent, Star Entertainment 4.3 per cent and Flight Centre 4 per cent.

Doghouse

The tech sector dived to its weakest level since October after the yield on ten-year Australian bonds jumped almost four basis points to 1.83 per cent. Sector leader Afterpay plunged more than 10 per cent before a partial recovery as yields fell back to 1.79 per cent helped it trim its loss to 3.6 per cent. Tech stocks are particularly vulnerable to rising borrowing costs because their valuations are leveraged to future earnings.  

Elsewhere in the BNPL sub-sector, Z1p Co slid 1.6 per cent. Sezzle dipped 3.6 per cent and Laybuy 4.4 per cent. On the wider tech spectrum, Megaport shed 4.4 per cent, Xero 3.8 per cent and WiseTech 1.6 per cent. Altium dropped 0.8 per cent.

IAG took investors on a wild ride. The insurer’s shares plunged more than 10 per cent amid questions about its exposure to troubled finance house Greensill. The share price trimmed its loss to 4 per cent after the company clarified that it had “no net insurance exposure” to Greensill entities.  

Gold miners wallowed near 11-month lows. Newcrest fell 1.6 per cent, Gold Road Resources 3.2 per cent and Northern Star 1.3 per cent.

Property giant Goodman Group slipped 1.1 per cent and supply-chain logistics specialist Brambles 1.3 per cent. Telstra shed 0.6 per cent and Coles 0.1 per cent.

Speculative interest remained soft. The S&P/ASX Emerging Companies Index dropped 0.1 per cent to its seventh loss in eight sessions.

Other markets

Asian markets mostly rebounded from morning weakness. The Asia Dow bounced 0.7 per cent. Hong Kong’s Hang Seng gained 1.35 per cent and Japan’s Nikkei 0.63 per cent. China’s Shanghai Composite cut its loss to 0.18 per cent.

Oil rebounded from overnight weakness. Brent crude rallied 49 cents or 0.7 per cent to $US68.73 a barrel. Gold edged up $7.90 or 0.5 per cent to $US1,685.90 an ounce.

The dollar recovered from a slide towards 76 US cents, edging up 0.07 per cent to 76.61 US cents.

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