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The share market was poised to extend yesterday’s rebound after a tech-led rally in the US as jobless claims fell to a pandemic-era low.

ASX futures rallied 27 points or 0.38 per cent, signalling further repairwork after Wednesday’s six-week low.

Gold recorded its longest winning run of the year. Oil and iron ore declined. Copper was boosted by a strike threat at BHP’s Chilean mine. The dollar rose towards 78 US cents.

Wall Street

US stocks advanced for the first time in three sessions as volatility abated on cryptocurrency markets. Technology stocks outperformed as treasury yields declined.

The tech-heavy Nasdaq Composite led with a rise of 236 points or 1.77 per cent. The S&P 500 put on 43 points or 1.06 per cent. The ‘tech-lite’ Dow Jones Industrial Average trailled with an advance of 188 points or 0.55 per cent.

Risk appetite recovered as Bitcoin and other digital tokens reversed some of the previous session’s heavy losses. Bitcoin bounced as much as 9 per cent to above US$42,000 and was lately ahead 0.8 per cent at US$40,424. The largest of the digital currencies crashed 31 per cent on Wednesday night, sending ripples through equity markets.

Tesla, which has a large holding of Bitcoin, rallied 4.14 per cent. Trading platform Coinbase climbed 3.83 per cent. Crypto-miner Riot Blockchain inched up 0.17 per cent.     

Tech giants Apple, Microsoft, Facebook, Netflix and Alphabet all gained at least 1 per cent. Buying interest was boosted by the yield on ten-year US treasuries dropping almost five basis points. Tech and other growth stocks thrive when borrowing costs weaken.

Broader market sentiment got a boost from positive signals from the jobs market. First-time claims for unemployment benefits declined to 444,000 last week, the lowest since March 2020. Economists polled by Dow Jones had expected a reading around 452,000.

“The jobless claims read shows once again that that we’re heading in the right direction,” Mike Loewengart, managing director of investment strategy at E-Trade Financial, said.

Australian outlook

The easing of the crypto panic gives the Australian market scope for further gains this session. Yesterday’s domestic trading action suggested there was still plenty of cash sitting on the sidelines waiting for a buying opportunity. A six-week low proved the perfect invitation: the S&P/ASX 200 bounced 88 points or 1.27 per cent. Despite Wednesday’s collapse, the index is actually five points ahead for the week going into today’s session.

Tech and bond proxies were the best of the US sectors overnight. Tech gained 1.87 per cent, real estate 1.34 per cent and health 1.04 per cent. The two sectors with the largest weighting on the ASX were subdued. Financials inched up 0.09 per cent and materials gained 0.05 per cent. The energy sector dipped 0.12 per cent.

April retail sales figures are due at 11.30 am AEST. Flash manufacturing and services PMIs are due an hour before the market opens.

The dollar climbed 0.7 per cent to 77.74 US cents.

Commodities

Gold has been a big winner from the latest inflation scare and attracted some of the funds fleeing cryptos. The yellow metal rose for a sixth session, its longest win streak of the year. Gold for June delivery settled 40 cents or 0.02 per cent ahead at US$1,881.90 an ounce. The NYSE Arca Gold Bugs Index improved 1.02 per cent.

“Investors took big steps over the past few days toward recognizing gold’s traditional role as the pre-eminent hedge against inflation and currency depreciation,” Brien Lundin, editor of Gold Newsletter, told MarketWatch.

Iron ore retreated for a second day following China’s threat to fire up domestic production. The spot price for ore landed in China declined $4.60 or 2.1 per cent to US$210.85 a tonne. BHP’s US-listed stock closed flat after its UK-listed stock fell 0.58 per cent. Rio Tinto put on 0.5 per cent in the US after losing 0.18 per cent in the UK.

Copper rose back above US$10,000 a tonne as union officials at the Escondida mine in Chile warned of strike action if contract talks with BHP flounder. Benchmark copper on the London Metal Exchange bounced 0.5 per cent to US$10,031.50 a tonne. Lead put on 2.3 per cent, zinc 0.8 per cent and tin 2 per cent. Aluminium declined 0.7 per cent and nickel 1 per cent.

Oil faded for a third night as traders priced in the possible return to market of Iranian supply if negotiators reach a deal over the country’s nuclear program. Brent crude settled $1.55 or 2.3 per cent weaker at US$65.11 a barrel.

“Crude and product prices continue to price in some additional downside risk as the U.S. and Iran make progress towards a deal,” Robbie Fraser, global research and analytics manager at Schneider Electric, wrote.

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