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Post-dividend rebounds in BHP and CSL helped the share market rise for the first time in three sessions following a record close on Wall Street.

The S&P/ASX 200 rallied 36 points or almost 0.5 per cent to 7523. The advance lifted the index 34 points into positive territory for the week.

Bulk metal miners shrugged off a two-week low in iron ore. A one-month high in crude boosted Woodside and other oil companies. CSL steered the healthcare sector towards its first gain in three sessions.

What’s driving the market

Positive signals from Wall Street ahead of tonight’s keenly-anticipated August jobs report encouraged buyers after a wobbly start to the month. A pandemic-era low in claims for unemployment benefits helped the S&P 500 and Nasdaq Composite grind out new records. The S&P 500 put on 0.28 per cent and the Nasdaq 0.14 per cent.

“Recent data suggested that the country’s labour market is charging ahead despite a surge in COVID-19 infections,” Kalkine Group CEO Kunal Sawhney said.  “All eyes are now glued to the key employment report due tonight, which may potentially guide on the Fed’s upcoming moves on its support for the economy. 

“Investors are curiously looking for clues on when exactly the Fed will commence winding back its massive stimulus program. The market participants may get some clarity on this timeline at the Fed’s policy meeting due later this month.” 

Energy was one of the best-performing sectors on both sides of the Pacific. A one-month high in crude and a firming dollar helped the Australian sector rise 1.2 per cent this morning. Overnight, Brent crude firmed 2 per cent following a sharp drop in US crude stockpiles.

“Confidence that the market will continue to see inventories drawn down saw crude oil prices extended recent gains,” commodity strategist Daniel Hynes of Hynes Commodities said. “Nearly 94% of Gulf of Mexico crude production remains shut days after Hurricane Ida.

“This represents around 1.7mb/d of crude. While most oil refiners escaped major damage, they are likely to be offline for several weeks.’

Santos climbed 1.45 per cent, Woodside Petroleum 1.47 per cent and Oil Search 0.52 per cent.

The morning’s economic data reinforced the impact of lockdowns. Retail turnover slid a seasonally-adjusted 2.7 per cent in July, the biggest fall of the year. The decline followed a 1.8 per cent decline in June.

“Lockdowns and stay-at-home orders in many parts of Australia continued to impact retail trade in July, with many non-essential retail businesses closing their physical stores,” Ben James, ABS Director of Quarterly Economy Wide Surveys, said.

“In particular, the first full month of lockdown in New South Wales, following the Delta outbreak in June, saw retail turnover in the state fall 8.9 per cent. This was the largest fall of any state and territory since August 2020.”

Construction work contracted sharply last month as Victoria and the ACT joined New South Wales in lockdown. The AIG/HIA Performance of Construction Index dived 10.3 points to 38.4, well below the 50-point level that separates expansion from contraction.  

Going up

Rebounds in base metals helped the big three miners look past a two-week low in iron ore. Rio Tinto advanced 2.7 per cent, BHP 1.32 per cent and Fortescue Metals 0.63 per cent.

Mineral sands miner Iluka climbed 2.67 per cent to an all-time high. Coal miner Whitehaven advanced 4.89 per cent to a pandemic-era peak. Also strong were Alumina +6.28 per cent, Orocobre +5.03 per cent, Pilbara Minerals +2.49 per cent and OZ Minerals +1.59 per cent.

CSL bounced 0.31 per cent from yesterday’s post-dividend decline. A strong morning for the health sector saw ResMed rally 1.13 per cent, Cochlear 1.68 per cent, Ramsay Health Care 2.36 per cent and Sonic 0.69 per cent. Biotech Mesoblast continued to heal from a post-earnings plunge, rising 5.42 per cent.

Software-as-a-service provider Technology One rallied 2.62 per cent on news it acquired UK outfit Scientia for £12 million ($22.45 million). Scientia provides timetabling and resource scheduling to British universities.

The speculative end of the market extended its win streak into a fifth session. The S&P/ASX 200 Emerging Companies index climbed 1.9 per cent to a new high. The index has put on 11 per cent in two weeks, significantly outperforming the wider market.

Going down

The tech sector trimmed three days of gains. Afterpay retreated 3.02 per cent, Xero 1.05 per cent and Nearmap 0.95 per cent.

Automotive aftercare specialist AMA Group slumped 4.49 per cent to a 15-month low after confirming media reports it was reviewing its options to manage the hit from Covid-19. The company said repair volumes had declined but its cash and debt position remained strong.

The banks were mixed. Declines in ANZ (-0.45 per cent) and Westpac (-0.1 per cent) were offset by rises in CBA (+0.36 per cent) and NAB (+0.6 per cent). Macquarie Group put on 0.63 per cent.

Other markets

Most Asian markets followed Wall Street higher. The Asia Dow rallied 0.48 per cent, China’s Shanghai Composite 0.17 per cent and Japan’s Nikkei 0.91 per cent. Hong Kong’s Hang Seng dropped 0.35 per cent

US futures were broadly steady ahead tonight’s employment data. S&P 500 futures firmed three points or 0.06 per cent.

Oil eased from a one-month high. Brent crude dipped nine US cents or 0.12 per cent to US$72.94 a barrel.

Gold climbed US$4.50 or 0.25 per cent to US$1,816 an ounce.

The dollar rose 0.08 per cent to 74.03 US cents.

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