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A choppy morning saw Aussie shares push for their fourth gain in five sessions after briefly shedding most of their gains  

The S&P/ASX 200 slashed an initial advance of 56 points to single digits before rallying once more to a mid-session gain of 44 points or 0.67 per cent. The advance followed a strong end to last week on Wall Street.

Resource, tech and banking stocks provided momentum. Healthcare providers, supermarkets and utilities dragged.

What’s driving the market

An end-of-week relief rally in the US provided a solid platform for gains this morning. The S&P 500 surged 1.92 per cent on Friday as futures markets marked down the odds of a 100 basis point rate increase next week.

“Closely watched Fed whisperer Nick Timiraos… penned a weekend piece that seemed to suggest a 75bp hike was all but certain,” NAB’s director of economics Tapas Strickland said. “Market pricing for a 100bp hike fell to 19% on Friday from as high as 63% on Wednesday,” he added.

Fears that surging rates will tip western economies into recession have driven equity benchmarks sharply lower this year. The S&P 500 finished last week around 19 per cent off its high. The ASX 200 has fallen almost 13 per cent, cushioned by a post-pandemic surge in commodity prices.

Energy stocks spearheaded gains this morning after Brent crude overcame a brief dip below US$100 a barrel. The international oil benchmark was lately up three cents or 0.03 per cent at US$101.19 after trading beneath US$99.50 this morning.

Oil prices rallied on Friday amid doubts over the ability of the OPEC+ oil cartel to increase production following a visit from US President Joe Biden to Saudi Arabia.

“Everybody and their brother who digs down into the Saudi situation see that they don’t have a lot of capacity left,” John Kilduff, partner at Again Capital, told CNBC.

Biden’s visit was seen as a request for help with this year’s explosive rise in energy prices. Higher fuel prices have been one of the main contributors to this year’s explosive rise in inflation. A retreat in prices last week helped soothe worries about how high central banks will have to raise rates to bring inflation back within their target ranges.  

This morning, Santos put on 1.5 per cent. Woodside Energy gained 1.49 per cent. Beach Energy firmed 1.81 per cent.

Going up

The beleaguered tech sector climbed 1.3 per cent to a six-week high as interest rate worries continued to ease. BrainChip popped 6.36 per cent, WiseTech 5.62 per cent and Block 4.12 per cent.

EML Payments climbed 5.39 per cent after confirming media reports of takeover interest. The payments platform provider said the board considered two change-of-control proposals last month, but discussions had since ceased.  

Suncorp jumped 5.05 per cent after ANZ bought the Queensland insurer’s banking business for $4.9 billion. The acquisition hands ANZ $47 billion in home loans, $45 billion in deposits and $11 billion in commercial loans.

Suncorp said the sale of Suncorp Bank would continue the “reshaping and simplification of the Suncorp Group, and positions both the insurance and banking businesses for ongoing growth and success”.

ANZ placed its shares in a trading halt while it tapped capital markets. The acquisition will be partly funded by 1 for 15 pro rate accelerated renounceable entitlement offer. The bank also announced net interest margins improved by five basis points last quarter to 1.63 per cent as interest rates rose.

Upbeat trading updates from US giants Citigroup and Wells Fargo helped lift the rest of the financial sector. Macquarie Group climbed 2.38 per cent, Westpac 0.9 per cent, NAB 0.76 per cent and CBA 0.11 per cent.

Record coal prices and solid production helped drive Whitehaven up 4.9 per cent to a new record. The coal miner expects to report full-year earnings of approximately $3 billion after meeting production guidance.

Rivals New Hope and Coronado climbed 2.39 and 1.2 per cent, respectively. The three coal miners were the index’s best performers last week, logging double-digit gains.

A contract win helped lift Worley 1.97 per cent. The project manager said it had won three-year design and construction contracts from Saudi Arabian oil and gas giant Aramco.

Going down

The flipside to this morning’s improvement in risk appetite was pressure on defensive corners of the market. Biotech CSL slipped 0.9 per cent, supermarket Coles 1.21 per cent, Woolworths 0.96 per cent and property giant Goodman 0.5 per cent.

APA Group shed 2.66 per cent, A2 Milk 2 per cent and The Lottery Corporation 1.66 per cent.

Legal costs and lower sales are expected to cut analytical software firm Nuix‘s full-year earnings by more than half. The firm expects earnings before interest to be in the range of $10-$12 million, down from $30.5 million last fiscal year. The share price sank 12.33 per cent to a fresh all-time low.

A 10.3 per cent dip in Q4 sales revenue helped push Lynas Rare Earths down 1.55 per cent. Production was affected by water shortages in Malaysia. Strong prices helped the miner report record sales receipts of $351 million.  

Other markets

Asian markets built steadily. The Asia Dow put on 0.57 per cent, China’s Shanghai Composite 0.64 per cent and Hong Kong’s Hang Seng 0.92 per cent. Trade in Japan was suspended for a public holiday.

US futures overcame a brief wobble. S&P 500 futures were recently ahead eight points or 0.2 per cent.

Gold rallied US$8.50 or 0.5 per cent to US$1,712.10 an ounce.

The dollar regained 68 US cents this morning, lately buying 68.07 US cents.

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