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The share market reversed Friday’s loss as reports of progress in Russia-Ukraine peace talks boosted US equity futures and drove down the price of oil.

The S&P/ASX 200 rallied 83 points or 1.18 per cent by mid-session.

Ten of 11 sectors rallied, led by banks, healthcare companies and supermarkets. An earnings upgrade lifted agribusiness Elders more than 12 per cent. Commodity stocks trailled as crude and gold declined.

What’s driving the market

US equity futures rallied as positive signs from weekend ceasefire negotiations raised hopes of a breakthrough in halting the war in Ukraine. Officials from both Russia and Ukraine suggested talks could yield results within days.

“I think that we will achieve some results literally in a matter of days,” Ukrainian negotiator and presidential adviser Mykhailo Podolyak said.

Russian delegate Leonid Slutsky said talks had made “substantial progress“.

“According to my personal expectations, this progress may grow in the coming days into a joint position of both delegations, into documents for signing,” Slutsky said.

S&P 500 futures firmed 26 points or 0.62 per cent, sharpening hopes of a rebound tonight. On Friday, the US benchmark fell 1.3 per cent.

Energy prices retreated on the prospect of a cessation of hostilities. Brent crude fell US$3.66 or 3.25 per cent to US$109.01 a barrel.

Gold, a traditional haven in times of geopolitical tensions, backed down US$4.70 or 0.24 per cent to US$1,980.30 an ounce.  

On Friday, the Dow sealed a fifth straight losing week with a drop of 0.69 per cent. The blue-chip average’s run of weekly declines is the longest in almost three years.

Adam Crisafulli, founder of Vital Knowledge, said the S&P 500’s resilience offered encouragement. The 4200 level has provided support for the broadest of the three major indices during three recent tests. The index closed at 4204 on Friday.

“The near-term risk/reward is positive if for no other reason than the tape just had about every bit of negative news thrown at it and still couldn’t sustain a material break below the 4200 level,” he said.  

Going up

The heavily-weighted banks provided much of the morning’s momentum as Australian government bond yields retested Friday’s three-year high. The rally came ahead of what is expected to be the first increase in official US rates since 2018. Lenders welcome higher rates for the opportunity to expand margins.

ANZ put on 2.67 per cent, CBA 2.61 per cent, Westpac 2.6 per cent and NAB 1.75 per cent. Other heavyweights to see gains included CSL +2.4 per cent, Coles +1.58 per cent and Woolworths +0.79 per cent.

Fertility clinic operator Virtus Health jumped 7.01 per cent after accepting an improved takeover offer from European investment firm CapVest. Virtus shareholders will receive $8.25 per share, less any dividend paid after today. The deal ends a fierce bidding war between CapVest and Australian private-equity firm BGH Capital.  

Tailwinds for agribusinesses were underscored by an earnings upgrade from Elders. Shares in the company climbed 12.29 per cent to a 12-year high on news the company expects full-year underlying earnings to be 20-30 per cent higher than last year’s result.

Grain prices have soared this year after the Russian invasion of Ukraine dented supply from two of the world’s largest producers. GrainCorp rallied 3.02 per cent this morning to a new high.

Ampol firmed 2.29 per cent after securing a buyer for its Gull business in New Zealand. Australian investment manager Allegro will pay $532 million for the operation, which includes 112 petrol stations and an import terminal.

Day trader favourite Melbana Energy entered a trading halt to raise funds. The share price had increased 600 per cent since the start of the year as the company drilled a Cuban oil prospect.  

Junior explorer Globalith jumped 7.84 per cent after gaining Mineral Resources as a cornerstone investor. Mineral Resources took a 5 per cent stake in Globalith as part of a $29.9 million capital raising. Shares in Mineral Resources edged up 0.24 per cent.

Going down

Magellan fell 0.56 per cent to a fresh seven-year low as market volatility compounded net outflows at the fund manager. Funds under management dropped to $69.1 billion by the end of last week from $77.2 billion on February 23.

Westgold Resources skidded 13.93 per cent after raising $100 million from investors at a discount. The funds will be used to accelerate the gold miner’s growth strategy and expand production. The share price held at the raising price of $2.10.

Nickel miner IGO Ltd slid 2.51 per cent after disruptions to the nickel market delayed a proposed merger with Western Areas. IGO said it expected a “short delay” as Western Areas and an independent expert considered the implications of recent dislocations in metals markets. The London Metal Exchange suspended nickel trade last week after prices more than doubled.

Woodside Petroleum eased 0.72 per cent as crude began the week on the back foot. Santos eased 0.46 per cent. Uranium miner Paladin Energy shed 5.75 per cent.

Other markets

A mixed but generally downbeat session on Asian markets saw the Asia Dow dip 0.08 per cent. China’s Shanghai Composite lost 1.14 per cent and Hong Kong’s Hang Seng 1.7 per cent. Japan’s Nikkei gained 1.14 per cent.

The dollar eased 0.3 per cent to 72.74 US cents.

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