Market Herald logo

Subscribe

Be the first with the news that moves the market

A strong quarter from Andrew Forrest’s Fortescue Metals helped the share market rise for the first time in four sessions with mining stocks and oil companies leading the rebound.

The S&P/ASX 200 climbed 72 points or 1 per cent by mid-session. Today’s rally broke a run of losses that knocked the index down more than 4.3 per cent in three sessions.

Fortescue and the other major bulk metal producers led the advance, with support from CSL, Santos and Woodside.

What’s driving the market

The ASX trimmed three days of heavy selling as investors drew confidence from a bounce in US equity futures and an overnight rally in mining stocks.

An 18.3 per cent after-market relief rally in Meta Platforms helped lift S&P 500 futures 28 points or 0.7 per cent. Nasdaq futures jumped 1.2 per cent as this morning’s result from Facebook’s owner came in stronger than feared.

While Meta’s result was at best mixed, it “was enough to send the shorts covering and the stock surging,” according to Jesse Cohen, senior analyst at Investing.com.

The rally in futures sharpened hopes of a Wall Street rebound tonight following a choppy overnight session. The materials and energy sectors outperformed as the S&P 500 edged up 0.21 per cent. The Nasdaq Composite dipped 0.01 per cent to its lowest close since November 2020 after being up as much as 1.7 per cent.

Back home, the heavily-weighted materials sector reclaimed lost ground by climbing 2.85 per cent. The threat of wider Covid lockdowns in China helped send the sector down 12 per cent in four sessions across the Anzac Day long weekend.

A busy session for quarterly reports included well-received updates from Fortescue, Sandfire Resources and Champion Iron, and misses from gold miners Newcrest, Silver Lake Resources and St Barbara (more below).   

Going up

Fortescue Metals upgraded its guidance after shipping a record 139.5 million tonnes of iron ore over the first nine months. The Pilbara miner raised its full-year shipment forecast to 185-188 million tonnes from previous guidance of 180-185 million tonnes.

The upgrade came after the company increased third-quarter shipments by 10 per cent from the prior corresponding quarter. The share price rose 4.85 per cent.

Rivals BHP and Rio Tinto rallied 3.39 and 2.36 per cent, respectively, following a tentative rebound this week in Chinese ore. Prices edged higher yesterday after authorities lifted Covid lockdowns in parts of the country’s steel-manufacturing heartland. Champion Iron firmed 3.7 per cent despite a dip in quarterly production.

Coles edged up 0.35 per cent after increasing quarterly sales revenue by 3.6 per cent to $9.1 billion. The result came as the supermarket battled absenteeism, flooding and inflationary pressures.

Other heavyweights to advance included CSL +1.18 per cent, Santos +0.76 per cent and Woodside +0.32 per cent.

AMP jumped 12.93 per cent to a five-month high on news it secured up to $699 million for its international infrastructure equity business. US investment firm DigitalBridge will acquire the business for an up-front fee of $462 million. Additional payments are dependent on performance and fund raisings.

Sandfire Resources surged 12.21 per cent from yesterday’s 14-month low after successfully integrating a Spanish acquisition and increasing production at its DeGrussa operation in WA. The miner said the MATSA mine in Spain was producing in line with guidance.

Resolute Mining firmed 7.81 per cent after increasing gold production by 2 per cent last quarter.

Orora climbed 3.43 per cent to an all-time high on news that earnings will increase this financial year, thanks to strength in the packager’s North American business.

Going down

Gold miner Silver Lake Resources plunged 7.5 per cent after withdrawing full-year guidance. The miner said intensifying labour shortages and supply-chain disruptions left it unable to predict Q4 performance with confidence.

Newcrest eased 1.33 per cent as news of a 14 per cent decline in quarterly production at the Telfer mine tempered increased output elsewhere. Overall gold production increased 10 per cent, thanks largely to higher mill throughput at Cadia.

St Barbara gave up 1.15 per cent on news production declined 6 per cent last quarter. The miner insisted it remained on track to deliver on full-year guidance.

Uranium miner Paladin Energy dropped 5.45 per cent, Tyro Payments 4.86 per cent and Polynovo 3.08 per cent.

Other markets

Asian markets improved with US futures. The Asia Dow advanced 1.22 per cent, China’s Shanghai Composite 0.59 per cent, Hong Kong’s Hang Seng 0.79 per cent and Japan’s Nikkei 0.65 per cent.

Oil reversed last night’s rebound. Brent crude declined US$1.27 or 1.2 per cent to US$103.68 a barrel.

Gold‘s losing run extended into a third session. The yellow metal dropped US$6 or 0.3 per cent to US$1,882.70 an ounce.

The dollar continued to lose ground, falling another 0.1 per cent to 71.15 US cents.

More From The Market Herald

" ASX Today: Traders weigh change of government, commodity gains

The share market looked set to open modestly lower after the Dow logged its longest run of weekly losses since 1932 and Australians

" ASX 200 rallied 52 points

he share market's bullish start to the new quarter continued after upbeat economic data triggered strong…

" A second day of falls saw the ASX 200 drop 59 points ​

Aussie shares erased the last of their gains for the week as risk aversion gripped regional…

" Health sector led the recovery, rising 1.6 per cent

Improved global sentiment following a round of upbeat economic data helped Aussie shares rally for the…