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Strong gains in BHP and Rio Tinto in overseas trade point to a positive start to Australian trade following a mixed close on Wall Street.

ASX futures rallied 32 points or 0.43 per cent, handing the S&P/ASX 200 a shot at breaking its longest losing sequence in almost three months. The Australian benchmark sank 42 points yesterday to a fourth straight loss.

The S&P 500 and Nasdaq Composite rebounded from two days of falls. The Dow was held down by an earnings miss from Disney.

BHP and Rio Tinto surged with iron ore and copper after troubled Chinese property developer Evergrande averted a default. Gold rose for a third night. The dollar dropped below 73 US cents for the first time in a month.

Wall Street

Growth stocks rebounded as the closure of bond markets for Veterans Day offered a circuit-breaker from two days of selling. Bond yields soared in response to hot inflation data, triggering heavy falls in tech stocks over the previous two sessions.

The growth-stock heavy Nasdaq Composite bounced 82 points or 0.52 per cent. The S&P 500 eked out a gain of three points or 0.06 per cent. The Dow Jones Industrial Average sagged 159 points or 0.44 per cent.

“We’re going to have this push and pull where we get these headline numbers that shock the markets a bit, like with inflation yesterday,” the chief investment strategist at BMO Wealth Management, Yung-Yu Ma, said.

Tech stocks recovered from Wednesday’s plunge, which followed the biggest surge in US consumer prices in 31 years. Microsoft, Netflix and Facebook parent company Meta advanced.

A broker upgrade lifted Nvidia 3.16 per cent ahead of next week’s earnings report. Other chipmakers also rose. The Philadelphia SE Semiconductor index bounced 1.94 per cent.

Small caps clawed back almost half of their 2 per cent decline over the previous two nights. The Russell 2000 rallied 0.91 per cent.

Materials was the best-performing sector as raw materials prices rallied in response to Evergrande meeting another round of  bond interest payments. China’s second-largest real estate developer once again defied fears of a default, paying interest on bonds worth more than $148 million.

Disney was the biggest drag on the Dow, falling 7.04 per cent after Disney+ subscriber numbers fell short of expectations. The miss sharpened speculation the market for the streaming service was nearing saturation.

Australian outlook

Relief ahead for Australian investors following four days of grinding, albeit generally modest, losses. The S&P/ASX 200 has given up 75 points or around 1 per cent this week, much of it yesterday. A partial recovery yesterday afternoon offered the first suggestion dip-buyers were entering the market.

BHP and Rio Tinto looked set to lead following a strong night in overseas trade. BHP’s US-listed stock jumped 5.24 per cent and its UK-listed stock 3.89 per cent in a positive response to last night’s AGM. CEO Mike Henry told shareholders the miner was continuing to adapt production to shifting global demand for resources.

Rio Tinto gained 4.41 per cent in the US and 3.42 per cent in the UK. The rallies came as iron ore jumped more than 5 per cent and copper almost 2 per cent (more below).

Financials, the other pillar of the Australian market, rose 0.31 per cent in the US. The tech sector put on 0.53 per cent and energy 0.31 per cent.  

Drags in the US included utilities -0.75 per cent, industrials -0.42 per cent and health -0.23 per cent.

A full week of domestic annual general meetings winds down with updates today from LendLease and Adore Beauty.

IPOs: today brings the biggest float of the week. APM Human Services International, which lists today at 12 pm AEDT, is expected to command a market capitalisation of more than $3 billion, dwarfing Siteminder’s launch on Monday. The Perth-based human resources firm provides disability services. Most of its customers are government agencies.   

The dollar has fallen sharply over the last two weeks, from above 75.5 US cents at the end of October to below 73 cents overnight. The Aussie was last down 0.6 per cent at 72.89 US cents. Yesterday’s weak jobs data added to pressure on the currency.

Commodities

Iron ore and copper rebounded as fears of a messy end to China’s property boom receded. Evergrande made interest payments. Chinese state media signalled Beijing was preparing measures to help debt-strapped developers access lending markets. An unverified report this morning suggested the People’s Bank eased controls on lending to the property sector.

“It’s about maintaining stability,” Xiao Fu, strategist at Bank of China International, told Reuters.

The spot price for iron ore landed at Tianjin jumped US$4.70 or 5.3 per cent to US$94.20 a tonne. Copper for December delivery rose 1.8 per cent to US$4.40 a pound in US trade.

US gold miners rallied as the metal logged a sixth straight gain, its longest win streak since May. Gold for December delivery settled US$15.60 or 0.8 per cent ahead at US$1,863.90 an ounce. The NYSE Arca Gold Bugs Index climbed 2.53 per cent.

“Should gold prices hold near $1,850/oz this week, new investor inflows are likely to materialize and $1,900/oz could be the next upside target,” Citi strategists told clients.

Oil mounted a tepid rebound from Wednesday’s sharp decline. Brent crude settled 23 US cents or 0.3 per cent higher at US$82.87 a barrel, a day after falling 2.5 per cent.

LNG‘s bounce was more convincing. US gas futures rebounded 5.5 per cent to US$5.149 per million British thermal units.

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