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The share market gave up a second day of gains as declining US equity futures sapped buyer enthusiasm after last night’s Wall Street rebound.

The S&P/ASX 200 faded to a mid-session loss of 19 points or 0.3 per cent after earlier rising as much as 34 points. The index rose yesterday and has not managed back-to-back gains in more than three weeks.

Gains in energy producers and defensive sectors were outweighed by declines in tech and consumer stocks. The heavyweight materials and financial sectors turned negative late morning.

What’s driving the market

Tentative optimism briefly crept back into the market as Wall Street roared back from its worst week in two years. The S&P 500 surged 2.45 per cent overnight as a broad rally lifted almost 90 per cent of component companies.

“Equities came back from the holiday Monday in the US to a reprieve,” NAB economist Taylor Nugent said. “Across other assets, price movements were relatively muted in the context of recent price action, but consistent with rebound in risk sentiment,” he added.

A decline in US futures helped unravel this morning’s initial ASX advance. S&P 500 futures declined 29 points or almost 0.8 per cent.

Oil also moved sharply lower. Brent crude slumped US$3.79 or 3.3 per cent to US$110.86, comfortably erasing overnight gains. Iron ore futures fell 4.1 per cent in Chinese trade.

Sentiment remained fragile following several weeks of heavy selling that dragged Wall Street into a bear market and the ASX into a technical correction. The golden question for investors is whether share prices had fallen far enough to factor in higher rates, inflationary pressures and slower economic growth.

“Only time will tell if Tuesday’s recovery in global stocks is another dead cat bounce as there have been multiple false signals in the share market this year,” Kunal Sawhney, chief executive of research group Kalkine, said.

“It seems important for investors and traders to exercise caution and avoid getting caught on the wrong side of the trade. Meanwhile, investors with a long-term horizon can refrain from paying too much attention to such short-term signals.”

CNBC noted overnight there have been 11 instances during this year’s US bear market where the main indices have bounced more than 2 per cent, only to fall away in subsequent sessions.

Going up

Energy producers led for a second day before a reversal in Brent crude whittled their gains. Beach Energy cut its advance to 1.7 per cent, Woodside Energy 1.02 per cent and Santos 1.2 per cent.

Queensland coal miner Stanmore Resources bounced 10.08 per cent after slamming government royalty increases. CEO Marcelo Matos said the company was “very disappointed” in the changes.

“The increases to the royalty rates without formal notice or consultation with the industry are unprecedented. The impact of these increases will be felt the most by workers and suppliers in regional Queensland communities that underpin the resources sector and make it Queensland’s largest export industry,” Matos said.

Fletcher Building climbed 5.41 per cent off a 19-month low after forecasting a $100 million increase in earnings in FY23. The building products manufacturer expects to make $750 million this financial year.

Other notable advances included Ampol +5.14 per cent, APA Group +4.01 per cent and Iress +3.6 per cent.

A pair of contract wins in New Zealand helped lift Downer EDI 1.71 per cent. The engineering group was awarded road maintenance contracts by Auckland Transport worth $800 million over ten years.

Going down

The beleaguered  BNPL sector was back under the pump. Splitit dropped 7.14 per cent to an all-time low. Zip Co fell 8.1 per cent. Afterpay parent Square dipped 0.86 per cent.

The biggest heavyweight drags were Wesfarmers -1.65 per cent, Fortescue Metals -0.91 per cent and Westpac -0.81 per cent.

St Barbara slumped 13.94 per cent to a six-and-a-half-year low after deferring a decision on expanding operations at its Simberi mine in PNG. The gold miner will instead carry out a strategic review to decide where best to allocate capital across its three operations.

Waste manager Cleanaway slid 2.8 per cent on news repairs to its New Chum landfill in Queensland will likely continue right through the next financial year and cost up to $40 million. The firm will also incur $6 million in net costs this financial year fixing flood damage at other sites.

A boardroom rift led to a mass exodus of directors at finance firm Humm Group. Five directors announced they will quit, citing unwillingness to work with Andrew Abercrombie after he opposed the sale of the firm’s consumer finance operation to Latitude. The share price fell 3.81 per cent.  

Asset manager Janus Henderson eased 2.57 per cent. Ali Dibadj will join as CEO.

Fisher & Paykel Healthcare declined 0.62 per cent as its shares traded ex-dividend.

Other markets

Asian markets turned mixed in late-morning action. The Asia Dow shed 0.46 per cent. China’s Shanghai Composite dipped 0.11 per cent. Hong Kong’s Hang Seng lost 0.5 per cent. Japan’s Nikkei traded unchanged.

Gold wilted US$10.20 or 0.55 per cent to US$1,828.60 an ounce.

The dollar declined 0.3 per cent to 69.39 US cents.

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