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The share market firmed towards its first rise in a week after briefly erasing a 128-point rally.

A roller coaster session saw the S&P/ASX 200 surge in opening trade, give it all back then rise once more to a mid-session gain of 107 points or 1.57 per cent.

Strength in CSL, Wesfarmers and Rio Tinto helped offset pressure from Block and Fortescue Metals. Gold miner Newcrest slumped more than 5 per cent despite reaffirming full-year production guidance.  

What’s driving the market

A week of intraday fades finally offered investors encouragement after the market retested yesterday’s close and rebounded. Despite the recovery, the ASX 200 remained firmly on track for a third straight weekly loss. The index has given up 3.3 per cent in four sessions, much of it across the Australia Day break.

A volatile week for equity markets continued with further losses on Wall Street overnight as early buying gave way to a mid-session reversal. The S&P 500 finished 0.54 per cent in the red as upbeat economic growth data drove the US dollar sharply higher.

With a session left to trade, the US benchmark has fallen 1.62 per cent this week. The Dow and S&P 500 are on track for a fourth straight weekly loss. The Nasdaq is deep in correction territory and nearing a bear market after falling 17.6 per cent from its November peak.  

“Markets are bracing themselves for a series of rate hikes by the Fed starting March,” Kalkine Group CEO Kunal Sawhney said. “Most of the forecasts are pointing to more than one interest rate hike in 2022, followed by more aggressive monetary policy tightening in the next year. The central bank could continue raising interest rates until inflation is back under control, which currently sits at its highest level in 40 years.

“The change in the Fed’s policy settings could pave the way for earlier-than-expected interest rate rises in Australia. Although the RBA initially indicated its first interest rate hike in 2024, rising inflationary concerns and a strong job market have fuelled speculations of an early liftoff of cash rate by the end of this year.”

Hopes for an end-of-week Wall Street rebound tonight were fuelled by a well-received trading update from index heavyweight Apple and a subsequent jump in US futures.

Apple firmed 5 per cent in extended trade after reporting its strongest quarterly revenue on record. S&P 500 futures rallied 22 points or 0.5 per cent. Nasdaq futures climbed 1 per cent.

Going up

Biotech CSL bounced 3.71 per cent off a ten-month low as a retreat in borrowing costs encouraged bargain-hunters to buy stocks seen as vulnerable to higher rates. Clinuvel Pharmaceutical gained 6.73 per cent, HUB24 5.28 per cent and Codan 5.24 per cent.

Defensive stocks that compete with bonds for investment flows also benefitted from the decline in yields. Supermarkets Coles and Woolworths tacked on 2.99 and 2.55 per cent, respectively. Wesfarmers added 3.13 per cent. Property giant Goodman firmed 2.52 per cent.

Most of the bulk metal producers rallied as iron ore prices continued to defy weakness across the wider commodity complex. The spot price for ore landed in China crept up 0.5 per cent to a new four-month high.

“The prices of the steelmaking ingredient are riding high on the back of possible supply disruptions in Australia and a renewed property market boom in China,” Kalkine’s Sawhney said. “Concerns loom that the rising spread of the Omicron variant can disrupt the supply of iron ore, with the coming cyclone season causing an additional worry.”

Rio Tinto climbed 2.74 per cent, BHP 1.97 per cent and Champion Iron 6.35 per cent. Fortescue Metals eased 0.87 per cent.

Non-bank lender Wisr bounced 5.71 per cent following a record quarter. The firm’s revenues more than doubled, allowing it to declare its first cashflow-positive quarter.

Going down

Newcrest dropped 5.25 per cent as an overnight decline in gold and weak production guidance from its Lihir mine offset a 10 per cent increase in production last quarter. The miner said it was on track to deliver on full-year production guidance, but Lihir would achieve the lower end of guidance. All-in sustaining costs declined 11 per cent.

ResMed faded 0.76 per cent after quarterly revenue fell short of consensus targets. Revenues increased 12 per cent last quarter to US$894.9 million, shy of the US$926 million anticipated by analysts. The sleep and respiratory specialist will pay a quarterly dividend of 42 US cents per share on March 17.

PointsBet sagged 3.18 per cent to a 19-month low after reporting a $51.75 million loss for the quarter. The gaming group took in receipts of $90.4 million and spent $65.6 million on advertising and marketing. Despite the spend, wagering turnover in the US dipped 9 per cent from the prior corresponding period.

The major banks were mixed for a second day. Westpac advanced 1.04 per cent, CBA 0.53 per cent and ANZ 0.44 per cent. NAB eased 0.11 per cent.

Tech giant Block slipped 1.16 per cent. WiseTech shed 2.91 per cent and Computershare 1.19 per cent.

Other markets

A mixed morning on Asian markets saw the Asia Dow rise 1.43 per cent and Japan’s Nikkei 1.45 per cent. China’s Shanghai Composite declined 0.23 per cent and Hong Kong’s Hang Seng 0.24 per cent.

Oil recouped a fraction of last night’s 0.7 per cent decline. Brent crude bounced 30 US cents or 0.34 per cent to US$88.47 a barrel.

Gold also revived, rising US$4.40 or 0.25 per cent to US$1,797.50 an ounce.

The dollar bounced 0.04 per cent to 70.38 US cents.

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