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Aussie shares drifted below break-even as the market consolidated its biggest advance in two weeks.

A range-bound morning saw the S&P/ASX 200 flip an early gain of 19.5 points into a mid-session loss of 19 points or 0.26 per cent. Investors showed little appetite to add to yesterday’s 63-point advance despite positive overseas leads.

Gains in Afterpay, CSL and Woodside Petroleum were offset by declines in property companies, miners and banks.

What’s driving the market

The Australian market yesterday front-ran gains on Wall Street, leaving local investors to wait to see if last night’s US rebound was more than a short-term reflex. The S&P 500 bounced 1.78 per cent from its worst three-day loss since September. The Dow put on 561 points.

“Despite a surge in new virus cases, investors seem to be feeling more optimistic about the US economy and severity of the Omicron variant. Although the new variant has overtaken Delta in the US, the government seems hopeful that higher inoculations could prevent the spread of this COVID-19 strain,” Kalkine Group CEO Kunal Sawhney said.

“With no key economic events planned in the ongoing week, one can expect a quiet week ahead of Christmas,” he added. “The share market performance is expected to be driven by updates around the Omicron variant and the resultant lockdown restrictions, besides any corporate surprises.”

Back home, risk appetite was kept in check by surging Covid cases. New South Wales reported a record 3,763 new cases ahead of a national cabinet meeting to discuss the outbreak.

Unsurprisingly, Covid testers have ranked high among this week’s best performers. Healius, Sonic Healthcare and Australian Clinical Labs hit all-time highs yesterday. This morning, ACL climbed 3.3 per cent. Healius eased 0.09 per cent and Sonic 0.55 per cent.  

Going up

Lithium miners rebounded amid signs US President Joe Biden’s green energy-friendly social spending bill still has a pulse. Senate Democrats vowed to press ahead with a vote on the package despite resistance from a key supporter. Biden said the bill could still pass.

Pilbara Minerals bounced 7.97 per cent. Liontown Resources gained 4.21 per cent.

Afterpay rallied 5.39 per cent from a 14-month low following a 7.69 per cent jump in US suitor Block overnight. Other heavyweights to advance included CSL +1.46 per cent, Woodside +0.58 per cent and Aristocrat Leisure +0.44 per cent.

The announcement of a special dividend helped lift builder Sunland to an all-time high. The group announced it had settled the sale of its Ingleside property in NSW for $35.3 million, a net profit of $11.9 million. The company will pay a fully-franked special dividend of 10 cents per share on January 13. The share price hit $2.90 before paring its rise to 1.42 per cent at $2.86.

Praemium climbed 2.13 per cent after selling its international operations to Morningstar for $65.1 million. CEO Anthony Wamsteker said the sale would unlock capital and allow the company to focus on its Australian platform and tech.

Builder Cimic inched up 0.18 per cent on news its joint venture with Ghella was selected to build a tunnel and station boxes for the Sydney-Western Sydney Airport rail line. The contract will generate revenue of $1.35 billion for Cimic’s CPB Contractors.

Takeover target Link Administration entered a trading halt pending an announcement regarding a “potential control transaction”.

Going down

BHP eased 0.91 per cent from a three-month high after withdrawing from the contest for Noront Resources. The Big Australian said it would not increase its offer after Andrew Forrest’s unlisted Wyloo Metals topped its bid for the Canadian nickel miner.

BHP’s Chief Development Officer, Johan van Jaarsveld, said, “BHP is committed to its strict capital discipline framework. While the Eagle’s Nest deposit is a promising resource, we do not see adequate long-term value for BHP shareholders to support an increase in BHP’s offer in order to match the C$1.10 per share proposal from Wyloo Metals Pty Ltd.”

Rio Tinto shed 2.18 per cent on news it will pay $1.15 billion to acquire a lithium project in Argentina. The miner will buy the Rincon project from Rincon Mining, a company owned by funds managed by private-equity firm Sentient Equity Partners.

Rio CEO Jakob Stausholm said, “The Rincon project holds the potential to deliver a significant new supply of batterygrade lithium carbonate, to capture the opportunity offered by the rising demand driven by the global energy transition. It is expected to be a long life, low-cost asset.”

The major banks retreated. CBA dipped 0.08 per cent, Westpac 0.48 per cent, NAB 0.94 per cent and ANZ 0.92 per cent.

Charter Hall Group slid 4.86 per cent after announcing plans to take a 50 per cent stake in fund manager Paradice Investment Management. The property group will pay $207 million in cash and equity. Paradice has $18.2 billion in funds under management invested in Australian and overseas equities.

Charter Hall’s Social Infrastructure REIT (CQE) gained 0.79 per cent after increasing its distribution guidance and announcing the acquisition of two childcare portfolios.

Other markets

A positive morning in Asia saw the Asia Dow rise 0.26 per cent, China’s Shanghai Composite 0.13 per cent, Hong Kong’s Hang Seng 1.11 per cent and Japan’s Nikkei 0.16 per cent.

US futures held broadly steady. S&P 500 futures were recently off a single point or 0.02 per cent.

Gold trimmed its overnight fall. The yellow metal rose 90 US cents or 0.05 per cent to US$1,789.60 an ounce.

Oil added to last night’s gain. Brent crude firmed 24 US cents or 0.32 per cent to US$74.22 a barrel.

The dollar edged up 0.07 per cent to 71.53 US cents.

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