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A revised takeover offer for Crown Resorts and a tentative rebound in Commonwealth Bank helped steady the share market at the end of a losing week.

The S&P/ASX 200 edged up a point or 0.01 per cent by mid-session. The benchmark remained on track for a weekly loss of more than 60 points thanks to sharp declines on Tuesday and Wednesday.

Crown Resorts jumped more than 16 per cent following an increased takeover offer from US private-equity firm Blackstone. Commonwealth Bank rebounded from two days of selling.   

What’s driving the market

The domestic benchmark briefly narrowed the performance gap with Wall Street as buyers dipped their toes in CBA’s beaten-up shares. The heavyweight financial sector inched off the six-week low that followed CBA’s Wednesday warning the battle for borrowers was shrinking profit margins.

CBA, the index’s largest company by market weighting, rallied 0.84 per cent. However, the market’s morning rally ran out of steam as the rest of the big four turned negative. ANZ faded 0.66 per cent, NAB 0.92 per cent and Westpac 0.23 per cent. Macquarie Group, whose earnings are less exposed to the mortgage market, climbed 1.11 per cent to a new record.

The S&P 500 edged higher overnight towards a winning week. The broadest of the major US indices rallied 0.34 per cent to extend its gain for the week to around 0.5 per cent. By contrast, the ASX 200 has fallen more than 0.8 per cent.

The Australian market has underperformed its US peer this week as the slow collapse of iron ore prices undercut the major miners and CBA’s margin warning dented the banks. Broader macroeconomic concerns remain.

“Although investors appear to have already digested the week’s disappointing update from the Commonwealth Bank, inflationary concerns and the possibility of an earlier-than-anticipated rate hike by the Fed continue to worry investors. Iron ore miners can be seen bearing the brunt of a recent fall in the commodity price to an 18-month low level on the bleak demand outlook for raw materials and steel products in China,” Kalkine Group CEO Kunal Sawhney said. 

“While inflation concerns could continue to dent the market sentiments for some time, the stocks could eventually harness the benefit of bargain hunting by investors. The Australian share market has largely remained under pressure this week despite the central bank ruling out the rate hike chances prior to 2024. Investors could chase for bargain hunting on the recently battered Australian stocks, offsetting losses to some extent in the share market.” 

Going up

Crown Resorts jumped 16.36 per cent following a revised takeover offer from Blackstone. The US private-equity outfit raised its non-binding offer a third time to $12.50. The proposal follows previous offers of $11.85 and $12.35. The Crown board said it had yet to form a view on the offer.

Safe-and-steady defensive stocks have taken up the slack this week as the miners and banks floundered. Woolworths firmed 0.4 per cent this morning to a three-week high. CSL gained 0.6 per cent, Goodman 0.1 per cent and Wesfarmers 0.12 per cent.

Altium climbed 5.1 per cent to an all-time high following yesterday’s positive AGM trading update. Treasury Wine Estates gained 4.51 per cent off the back of yesterday announcing the purchase of a Californian wine-maker. Sonic Healthcare rose 3.76 per cent after reaffirming strong demand for its Covid testing services.

NextDC improved 0.63 per cent after reporting a strong start to FY22. The data centre specialist expects to grow revenues by 16-20 per cent and earnings by 19-23 per cent.

Janus Henderson shrugged off news long-term CEO Dick Weil will retire after 12 years at the helm of the asset manager. The share price climbed 1.76 per cent.

Going down

WiseTech retreated 3.3 per cent from record levels after reaffirming full-year guidance. CEO and found Richard White told shareholders the software maker anticipated revenue growth of 18-25 per cent and earnings growth of 26-38 per cent. The global outlook was complicated by supply-chain disruptions, capacity restraints and the threat of new Covid strains.

Footwear retailer Accent Group dipped 0.78 per cent on news pandemic store closures knocked around $40 million off earnings over the first four months of the financial year. Retail sales were $86 million lower than management projections. However, sales and margins have recovered since NSW and Victoria reopened.

Infection prevention firm Nanosonics slipped 5.55 per cent after signalling a modest contraction in gross margin this year. CEO and President Michael Kavanagh said overall gross margin was expected to decline to 75 per cent from 78 per cent in FY21 due to a changing revenue mix. The company reaffirmed the full-year outlook presented in August.

Other markets

A mixed morning on Asian markets saw China’s Shanghai Composite add 0.26 per cent and Japan’s Nikkei per 0.26 cent. The Asia Dow shed 0.3 per cent and Hong Kong’s Hang Seng 1.39 per cent.

S&P 500 futures rallied four points or 0.08 per cent.

Gold pushed back towards five-month highs, rising 80 US cents or 0.04 per cent to US$1,862.20 an ounce.

Brent crude rose eight US cents or 0.1 per cent to US$81.32 a barrel.

The dollar faded 0.06 per cent to 72.71 US cents.

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