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A rebound in energy producers helped lift the ASX after commodity prices rallied on Chinese plans to ease Covid lockdowns.

The S&P/ASX 200 shrugged off soft leads from Wall Street, climbing 12 points or 0.16 per cent by mid-session.

Santos and Woodside Petroleum rose after Brent crude bounced more than 6 per cent. Gains in iron ore and metals lifted most mining stocks. The major banks were mixed after long-term borrowing rates backed off recent highs.

What’s driving the market

Commodity markets rallied sharply overnight after Chinese authorities eased restrictions on parts of Shanghai. The tweak would allow around a quarter of the city’s 25 million citizens to leave quarantine.

Also stoking buying interest was a Russian vow to continue its attack on Ukraine. President Vladimir Putin said peace talks were “at a dead end”.

“This raises the spectre of continued risk of supply disruptions in the oil market. Europe, Russia’s major customer of its crude exports, has been reluctant to implement sanctions due to its heavy reliance on the fuel,” ANZ’s senior commodity strategist Daniel Hynes said.

“The Energy Information Administration added to the bullish sentiment by lowering its forecast for US crude output in 2022 and 2023 as shale producers grapple with higher production and labour costs.”

Brent crude jumped US$6.16 or 6.3 per cent overnight to US$104.64 a barrel. The international benchmark added to gains this morning, rising another 66 US cents or 0.6 per cent to US$105.30.

Iron ore rallied 1.7 per cent, copper 1.4 per cent and aluminium 0.5 per cent. The dollar climbed 0.2 per cent to 74.69 US cents.

Commodities strength helped offset a soft night on Wall Street as inflation continued to run at a 40-year high. The S&P 500 faded to a loss of 0.34 per cent as sellers jumped on an early rally after concluding a mild improvement in core inflation was unlikely to divert the Federal Reserve from a series of rate hikes.

“It remains to be seen how the Fed will react to the latest inflation reading after a hawkish readout of March meeting minutes last week. Speculations are rife that the US central bank could raise interest rates by a hefty 50 basis points,” Kunal Sawhney, CEO of research group Kalkine, said.

“Although financial markets are gearing up for the central bank’s inflation-fighting efforts, investors remain concerned about a potential economic contraction emerging from aggressive interest rate hikes.”

Going up

Energy producers Santos and Woodside Petroleum put on 1.31 and 0.28 per cent, respectively. Beach Energy gained 1.6 per cent.

Rio Tinto was the best of the major bulk metal miners, rising 2.07 per cent. Fortescue Metals added 0.54 per cent. BHP faded 0.12 per cent.

Uranium miner Paladin jumped 6.93 per cent. AVZ Minerals added 5.1 per cent, Whitehaven Coal 3.86 per cent and Regis Resources 3.85 per cent.

EML Payments jumped 10.9 per cent after confirming takeover interest from private equity. The payments company said discussions with US private investment giant Bain Capital took place earlier in the year but had now ceased.

Miner Iluka Resources climbed 1.33 per cent to an all-time high on plans to demerge its Africa-focused mineral sands operation. The company believes a demerger of Sierra Rutile will maximise the value of the deposits and allow Iluka to focus on its core Australian assets.

Progress on the Geelong Energy Hub lifted Viva Energy 1.57 per cent. The company announced it had approved funding to upgrade the Geelong Refinery to produce ultra-low sulphur gasoline. Viva will also acquire LyondellBasell Australia, a polymer manufacturer with a facility at the refinery.

Gaming group PointsBet bounced 0.33 per cent from a two-year low after launching an online casino product in Pennsylvania.  

Pancreatic cancer specialist OncoSil Medical jumped 66.67 per cent on news surgeons in Spain performed the first commercial treatment using the firm’s OncoSil device in Europe. Ten Spanish hospitals have been trained in the use of the device for radiation treatment.

Going down

The morning’s worst performers were a mixed bag. Building materials provider Adbri fell 5.79 per cent, fund manager Perpetual 2.64 per cent and rare earths miner Lynas 2.37 per cent.

At the heavyweight end, James Hardie dipped 1.99 per cent, Goodman 1.38 per cent, Macquarie Group 0.6 per cent and CBA 0.32 per cent.

Payments companies Tyro and Zip Co shed 2.34 and 1.33 per cent, respectively, following yesterday’s disappointing result from Afterpay.

The Star Entertainment Group fell 0.49 per cent to a 19-month low amid on-going negative publicity from an inquiry in Sydney.

Cloud-computing microcap Buddy Technologies’ time on the boards ended today in receivership. The company announced it had appointed FTI Consulting as receivers and managers. Shares that traded as high as 41.5 cents in 2017 were valued at six-tenths of a cent before the announcement.

Other markets

Asian markets were mixed. The Asia Dow rallied 0.58 per cent. Japan’s Nikkei rose 1.61 per cent. China’s Shanghai Composite slid 0.45 per cent. Hong Kong’s Hang Seng shed 0.15 per cent.

A strong rebound lifted S&P 500 futures 21 points or 0.48 per cent.

Gold eased for the first time in five sessions, falling US$2.30 or 0.1 per cent to US$1,973.80 an ounce.

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