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The ASX shrugged off Wall Street jitters ahead of a US central bank policy update tonight, rising for a fourth day to break 7400 for the first time.

Banks and oil companies did the heavy lifting as the S&P/ASX 200 rallied 22 points or 0.3 per cent. The index touched a new high of 7406.2 before easing to 7401 mid-session.

Commonwealth Bank, Woolworths, Wesfarmers, ResMed, James Hardie and Charter Hall Group were among heavyweights trading at all-time highs. Declines in Afterpay and the major miners kept the advance in check.

What’s driving the market

A month-long rally showed no sign of flagging despite a bout of Federal
Reserve-related nerves in the US. The S&P 500 dipped 0.2 per cent overnight as debate raged over how soon the US central bank will start to turn off the spigots pumping cash into the financial system. The Nasdaq Composite shed 0.71 per cent.

The ASX 200 has put on more than 450 points in four weeks since inflation worries peaked last month. In that time. Milestones have fallen in quick succession as economic data underlined the strength of the rebound. Bond yields – effectively borrowing costs – fell to multi-month lows as the RBA insisted the cash rate will likely remain at a record low until at least 2024.

 The financial sector hit a three-and-a-half-year high this morning as CBA continued its record run. The largest of the big four high-street banks rose 0.99 per cent to a new peak. NAB gained 0.9 per cent, ANZ 0.8 per cent and Westpac 0.55 per cent.

US futures marked time, with traders reluctant to add to bets ahead of tonight’s Fed update. S&P 500 futures were dead flat. Dow futures dipped 18 points or 0.05 per cent.

“All eyes are glued to the upcoming Federal Open Market Committee statement scheduled today, which is expected to turn into a test of the central bank’s inflation narrative,” Kalkine Group CEO Kunal Sawhney said. “Investors are worried over an early tapering of the bond purchase programme by the Federal Reserve. The latest uptick in producer prices has also fanned inflation anxiety,” he added.

Consumer confidence ticked higher last week as Victoria’s Covid-19 restrictions eased. The ANZ-Roy Morgan weekly index climbed 0.3 per cent to 111 points. Victoria reported five new locally-acquired cases in the 24 hours to midnight, including two announced yesterday.

Going up

The energy sector traded at a three-month high amid increasing speculation crude will test US$100 a barrel in the months ahead. This morning Brent crude climbed 59 cents or 0.8 per cent to US$74.58 a barrel, a two-year high.

“Oil prices continued to edge higher as the prospect of immediate Iran supply recedes, with no decision yet on the US re-joining a nuclear agreement with Tehran. At the same time, hopes of a strong recovery in fuel demand are keeping oil price elevated with resumed vehicle and air traffic in Europe, the US and China,” Kalkine’s Mr Sawhney said.

Woodside Petroleum rose 2.87 per cent, Beach Energy 1.29 per cent, Oil Search 1.94 per cent and Santos 1.43 per cent.

Big guns hitting new highs this morning included Wesfarmers +2.04 per cent, Woolworths 1.29 per cent, ResMed +2.44 per cent, James Hardie +1.12 per cent and Charter Hall Group +0.03 per cent.

Other heavyweights to notch gains included Goodman Group +1.16 per cent, Coles +0.97 per cent, CSL +0.51 per cent and Telstra +0.14 per cent.

A revenue upgrade lifted burns specialist Avita Medical 11.98 per cent. The company raised its revenue guidance for this quarter to $9.5 – $9.7 million from a previous range of $8.2 – $8.6 million.

“As people begin to return to normal activities after the confines of the COVID-19 pandemic, we have seen an increase in burn accidents requiring treatment with the Recell System in burn centres across the country,” Dr Mike Perry, Avita Medical’s Chief Executive Officer, said.  

Going down

A sharp drop in industrial metals weighed on miners. BHP slid 1.14 per cent, Fortescue 0.77 per cent and Rio Tinto 0.59 per cent. Oz Minerals shed 5.36 per cent, IGO 3.65 per cent and South32 1.54 per cent.

“A major sell-off was seen across the base metals complex yesterday, with LME 3M copper plunging by more than 4%,” ING commodities strategists Wengyu Yao and Warren Patterson wrote. “While technicals may have accelerated the move in copper yesterday, a combination of both macro and fundamental factors have suggested that the bull run in base metals may need to take a breather,” they added.

Gold stocks retreated as the yellow metal plumbed its weakest level in a month. Perseus fell 3.48 per cent, Ramelius 2.7 per cent and Newcrest 0.95 per cent.

Tech stocks trimmed three days of gains. Appen gave up 3.99 per cent, Nuix 3.8 per cent, EML Payments 3.51 per cent and Afterpay 1.26 per cent.

Grooming specialist Shaver Shop sagged 8.72 per cent after updating guidance. The company said it expected a full-year net profit after tax of $16.75 – $17.5 million on sales of $211 – $213 million.

Other markets

A downbeat session on Asian markets saw the Asia Dow rise 0.16 per cent, while China’s Shanghai Composite lost 0.39 per cent, Hong Kong’s Hang Seng 0.09 per cent and Japan’s Nikkei 0.32 per cent.

Gold was little changed after falling overnight to its weakest level in a month. The yellow metal edged up 10 cents or 0.01 per cent to US$1,856.50 an ounce.

The dollar bounced 0.12 per cent to 76.95 US cents.

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