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A volatile session saw stocks reach a three-week peak before trimming gains as banks and defensive assets sold off.

The ASX 200 pushed through 5400 for the first time since mid-March before paring its rise to six points or 0.1 per cent at 5294 at mid-session.

The fleeting  rally followed a strong night on Wall Street, where the S&P 500 surged 7.03 per cent after a dip in new infections raised hopes the pandemic may be close to peaking in the US. European stocks advanced as the infection rate slowed in Spain and Germany.

Gains in technology and resource stocks were outweighed by declines in defensive assets. The technology sector climbed 2.8 per cent. Share registry Computershare jumped 9.8 per cent after downgrading its full-year earnings outlook by 20 per cent.  Nearmap climbed 2 per cent, Altium 3.2 per cent and Afterpay 5.9 per cent.

BHP hit its strongest price since the first week of March before sagging to a loss of 0.1 per cent. Iron ore miner Fortescue broke $12 for the first time since January before trimming its rise to 1.7 per cent. Gold stocks were another bright spot as the precious metal traded at a seven-year peak. Northern Star added 7.4 per cent, St Barbara 3.4 per cent and Newcrest 3.1 per cent. Gold continued its bull run this morning, rising $14.50 or 0.9 per cent to $US1,708.30 an ounce after charging 2.9 per cent or $48.20 overnight.  

The energy sector rose 0.9 per cent after the head of Russia’s sovereign wealth fund said Russia and Saudi Arabia were “very, very close” to a deal to reduce crude production. Santos put on 0.9 per cent and Woodside 1.4 per cent. Trading in Oil Search was suspended while the company launched a massive $1.16 billion capital raising to help navigate the oil crash. Brent crude tacked on another 92 cents or 2.8 per cent this morning at $US33.97 a barrel.

The rally lost momentum as traders offloaded defensive stocks. IGA wholesaler Metcash fell 8.4 per cent following a broker downgrade, aged care operator Estia Health 5.9 per cent, supermarket Woolworths 2.3 per cent and utility APA Group 2.8 per cent. Hearing implant manufacturer Cochlear dropped 2.8 per cent after the company announced directors and senior executives would take pay cuts of up to 30 per cent to help offset the sales hit from the virus.

Westpac led losses among the big four banks, falling 1.3 per cent. Commonwealth Bank eased 0.5 per cent. ANZ 0.6 per cent and NAB 0.8 per cent.

Stocks resuming trade following heavy capital raisings had mixed fortunes. Broadcaster Southern Cross Media eased 1.9 per cent to 11.5 cents after raising $149 million at 9 cents. Travel agent Flight Centre put on 8 per cent at $9.63 after tapping shareholders for $562 million at $7.20 a share.

The morning’s economic data underlined the impact of the pandemic. Job advertising contracted 10.3 per cent last month, the biggest monthly fall since the GFC. A measure of services activity tumbled to 38.7 in March from a February reading of 47. Two-thirds of Australian businesses surveyed by the Australian Bureau of Statistics reported their turnover or cash flow had fallen as a result of the pandemic.

The market mood was brighter on Asian markets, where China’s Shanghai Composite gained 1.6 per cent, Hong Kong’s Hang Seng 0.5 per cent and Japan’s Nikkei 1.2 per cent. S&P 500 index futures were recently down less than a point or 0.1 per cent.

The dollar rose 0.5 per cent to 61.18 US cents.

What’s hot today and what’s not:

Hot today: Capital raisings generally induce a state of nervous insomnia in traders caught out by the suspension of trading. Traders holding Blackstone Minerals (ASX:BSX) breathed a sigh of relief after the nickel miner announced it had raised $6.8 million at a 62 per cent premium. The investor was a subsidiary of the world’s second-largest nickel cathode manufacturer, South Korea’s EcoPro. The companies will ally to develop a downstream processing project for Blackstone’s Vietnamese nickel-PGE project. The BSX share price surged 33.3 per cent.   

Not today: Investing in oil explorers ahead of drilling results is a fraught business, as shareholders in 88E Energy (ASX:88E) were reminded this morning. Shareholders saw half of their investment evaporate after the company announced disappointing results from its Charlie-1 appraisal well in Alaska. While the drillbit hit condensate gas, the well was plugged and abandoned while the company conducts analysis to determine whether the hydrocarbons can be commercialised. The share price was last down 55 per cent at nine-tenths of a cent.

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