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The share market drifted lower amid signs of buyer fatigue following a five-session rally across the Christmas break.

The S&P/ASX 200 inched to a 16-week high before rolling over. By mid-session, the Australian benchmark was off eight points or 0.11 per cent. The index had previously put on almost 3 per cent across the festive season.

Gains in index heavyweights BHP, CBA and CSL helped offset weakness in utilities and property stocks as a host of companies traded ex-dividend.

What’s driving the market

The week-long Santa rally finally showed signs of fatigue on both sides of the Pacific. The S&P 500 edged up 0.14 per cent to a fresh closing high overnight, but trading took on a defensive flavour.

The night’s best-performing US sectors were real estate, health and utilities – havens against any looming market volatility. Energy companies retreated despite a sixth straight rise in crude oil.

Strength in retailers helped the Dow join the S&P 500 in record territory. The blue-chip average logged a sixth straight advance with a rise of 0.25 per cent.  

“Santa has been good to investors this holiday season, and we look for another year of positive returns in 2022,” Scott Wren, senior global market strategist at Wells Fargo Investment Institute, said.

A decline in US equity futures this morning kept a lid on Australian gains. S&P 500 futures eased three points or 0.07 per cent.

Going up

Gains in the market’s three largest companies limited downside for the index. BHP put on 1.23 per cent, Commonwealth Bank 0.31 per cent and CSL 0.63 per cent. Support came from Rio Tinto +1.05 per cent, Wesfarmers +0.15 per cent and Westpac +0.23 per cent.

Mining stocks were among the morning’s best performers. Pilbara Minerals rose 2.52 per cent to a fresh peak. Mineral Resources gained 1.99 per cent. Other standouts included Life360 +4.61 per cent and Bega Cheese +3.47 per cent.

Humm Group rose 7.3 per cent following reports Bank of Queensland has engaged Goldman Sachs to advise on a possible acquisition of the buy now, pay later company. Humm announced earlier this month it had been approached by third parties regarding a sale of all or parts of the firm.

Neither company released a statement this morning regarding the reports. BoQ shares dipped 0.67 per cent.

Sandfire Resources climbed 1.52 per cent after Spanish regulators cleared the miner’s US$1.865 billion acquisition of the MATSA copper mine. The transaction is expected to conclude by the end of next month.

“The achievement of these key Government approvals in such a short space of time is a fantastic result, which satisfies all outstanding conditions precedent under the SPA [Sale and Purchase Agreement], clearing the way for this transformational transaction to be completed,” Karl Simich, Sandfire Managing Director and CEO, said.

Panoramic Resources firmed 1.92 per cent after announcing its Savannah nickel project in the East Kimberley shipped its first load to China. A second shipment is planned for February.

Going down

The utilities and REIT sectors were the biggest drags as a host of companies traded ex-dividend. APA Group slid 3.31 per cent, Charter Hall Retail 3.17 per cent and Dexus 2.81 per cent.

Mirvac shed 1.82 per cent, Charter Hall Group 0.44 per cent and BWP Trust 2.67 per cent. Stockland dropped 2.48 per cent,  Waypoint 2.25 per cent and Abacus 2.69 per cent. Toll road operator Transurban gave up 1.58 per cent.

Aside from APA, the morning’s worst performers were biotech Imugene -5.75 per cent, student placement service IDP Education -4.86 per cent and Covid tester Healius -3.08 per cent.

Metals recycler Sims hit a four-month high after selling a majority stake in its New York City recycling business to US investors. Sims will sell 50.46 per cent of Sims Municipal Recycling of New York for $63 million. Shares in the company touched $16.38 before easing 0.86 per cent to $16.10.

Other markets

Asian markets were mixed. The Asia Dow gained 0.26 per cent. China’s Shanghai Composite eased 0.01 per cent, Hong Kong’s Hang Seng 0.02 per cent and Japan’s Nikkei 0.12 per cent.

Brent crude firmed 16 US cents or 0.2 per cent to US$79.36 a barrel.

Gold declined US$3.20 or 0.18 per cent to US$1,802.60 an ounce.

The dollar edged up 0.05 per cent to 72.62 US cents.

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