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The ASX’s five-session winning run came under threat as weak US leads outweighed nine-year highs in iron ore and copper.

The S&P/ASX 200 declined 24 points or 0.34 per cent by mid-session. The index closed at a 13-month high yesterday, securing its second five-day win streak since late March.

What’s driving the market

Slender gains in Goodman Group, Fortescue Metals, Coles and Telstra were dwarfed by chunkier declines in CSL, industrials and banks.

Today’s setback followed a down night on Wall Street. US stocks surrendered their hold on record levels despite another round of broadly positive corporate earnings. The S&P 500 fell 0.53 per cent. The Nasdaq Composite dropped 0.98 per cent.

“Earnings overall remain very positive with financials having exceeded expectations by 38% and non-financials exceeding by 12% so far. Illustrating the sharp snap back in activity, Coca-Cola reports demand in March has returned to pre-pandemic levels. Key earnings come after the close today for IBM, while Netflix reports tonight,” NAB Director of Economics, Tapas Strickland, said.

US futures inched higher following a well-received after-market report from IBM. S&P 500 futures climbed eight points or 0.19 per cent. IBM shares rallied almost 3 per cent.    

Strength in commodity prices cushioned the market from a deeper loss. Iron ore climbed above US$180 a tonne yesterday for the first time since September 2011. Copper also neared its highest level in a decade.

“The US Dollar’s recent decline this month accelerated today pushing commodity prices higher,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC.

“The surge in LME [London Metal Exchange] inventories has stalled, with stocks falling for the last three consecutive days, providing some relief to the market,” ING commodities strategists Warren Patterson and Wenyu Yao wrote.

Rio Tinto faded 0.33 per cent after reaffirming full-year production guidance. The company increased Q1 iron ore shipments by 7 per cent over the same quarter last year. CEO Jakob Stausholm described the quarter as “an overall solid operating performance”.

Going up

BNPL darling Afterpay inched up 0.48 per cent after informing shareholders it was considering a secondary listing in the US. The company said a US listing made sense “given the US market is now the largest contributor to our business and is expected to grow strongly”. Underlying sales in the US increased 211 per cent quarter on quarter in the first three months of the year. The company’s headquarters would remain in Australia.

Other gains at the business end of the market were slight. REITs and consumer discretionary were the only sectors to advance. Property giant Goodman gained 1.27 per cent, Fortescue 0.8 per cent, Coles 0.65 per cent and Telstra 0.45 per cent.

On the wider market, Mineral Resources +3.52 per cent, EML Payments +3.11 per cent and Z1P Co +3.1 per cent were the best performers.

Latitude Financial finally made it onto the boards at the third attempt, quickly rising 9.23 per cent upon listing. Shares offered at $2.60 climbed as high as $2.99 before easing to $2.84. The Ahmed Fahour-led group abandoned its previous IPO attempt after investors baulked at the asking price.

Temple & Webster inched up 0.28 per cent after announcing plans to invest heavily in growing the business. The online furniture retailer said Australia was undergoing a “once in a generation” shift in shopping habits to online. The company increased its Q3 revenues by 112 per cent versus the same period last year. The growth strategy will involve investing in brand awareness, promotions, technology and new products.  

Going down

Fund manager Challenger tanked 13.1 per cent after declaring full-year net profit was expected to be at the bottom end of previous guidance of $390-$440 million. The company said a sharp decline in credit spreads had not been reflected in customer pricing.

Wet weather and breakdowns knocked about 10 per cent off production at coal miner Coronado Global‘s Australian operation. The company’s US operation saw stronger prices from the Chinese ban on Australian imports. Overall group sales fell 10.5 per cent quarter on quarter, due to the Lunar New Year. The share price slumped 7.14 per cent.

Woolworths moved to a majority stake in analytics business Quantum, increasing its shareholding from 47 per cent to 75 per cent at a cost of $223 million. The companies have worked together for eight years on products and marketing. Woolworths’ shares dipped 0.71 per cent.

A dip in sales revenue helped pull Lynas Rare Earths down 5.96 per cent. The company attributed the decline from $119.4 million in Q2 to $110 million last quarter to problems with shipping availabilities due to Covid and the Suez Canal blockage.

Resolute Mining lost 3.74 per cent after Chinese firm Chifeng Jilong Gold terminated an agreement to buy the company’s Bibiani mine in Ghana. The decision follows the Ghanaian government’s refusal to recognise the sale. Chifeng asked Resolute to return its US$5 million deposit.

CSL and Brambles sank 0.95 per cent, Newcrest 0.64 per cent and Woodside 0.55 per cent. Turning to the banks, CBA fell 0.86 per cent, ANZ 0.38 per cent, NAB 0.37 per cent and Westpac 0.2 per cent.

Other markets

A generally downbeat morning on Asian markets saw the Asia Dow decline 0.82 per cent, Hong Kong’s Hang Seng 0.08 per cent and Japan’s Nikkei 1.84 per cent. China’s Shanghai Composite resisted the trend with an up-tick of 1.11 per cent,

Oil was boosted by reports of shutdowns on Libyan oilfields over delayed government payments. Brent crude rallied 50 cents or 0.75 per cent to US$67.55 a barrel.

Gold extended overnight weakness, falling $2.70 or 0.15 per cent to US$1,767.30 an ounce.

The dollar rose 0.31 per cent to 77.89 US cents.

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