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The share market overcame early losses as resource stocks rebounded and investors bought healthcare providers and other defensive assets.
The S&P/ASX 200 flipped an opening 28-point fall into a gain of seven points or 0.09 per cent at the halfway mark.
Gold miners and energy producers were among the biggest drags after anti-lockdown protests in China rattled commodity markets. Healthcare providers, telecoms and supermarkets advanced.
What’s driving the market
The ASX regained its footing as the reverberations from the largest civil unrest in China in decades began to subside. China deployed a heavy police presence yesterday evening to ensure there was no repeat of the weekend’s anti-lockdown protests.
“Losses were pared as the prospect of greater near-term disruption to activity was weighed against eventual reopening and as Monday saw no repeat of weekend demonstrations amid a heavy police presence,” NAB economist Taylor Nugent said.
“With mounting evidence of public dissatisfaction with the current settings and another new daily record for COVID cases, a forward-looking focus remains on the prospect of movement away from COVID-zero.”
The market front-ran the China news yesterday, falling 0.42 per cent in anticipation of pressure on Wall Street. The S&P 500 duly fell 1.54 per cent overnight, with China growth concerns compounded by hawkish commentary from Federal Reserve officials.
“I think there was an excuse with maybe some China slowdown fears for people to collect a little profit that they made in the quarter,” Adam Parker, CEO and founder of Trivariate Research, told CNBC.
Asian markets mostly rebounded this morning. Hong Kong’s Hang Seng bounced 1.67 per cent. The Shanghai Composite rallied 0.78 per cent. The Asia Dow swung to a mid-session gain of 0.33 per cent. Japan’s Nikkei fell 0.47 per cent.
Back home, consumer confidence continued to improve last week, albeit from depressed levels. The ANZ-Roy Morgan confidence index climbed 1.8 per cent to its highest since early October.
Going up
Kiwi medical device manufacturer Fisher & Paykel Healthcare surged 10.47 per cent after beating first-half revenue guidance. Operating revenue of $690.6 million was ahead of August guidance of $670 million and up 21 per cent on pre-pandemic performance.
A strong morning for healthcare stocks saw sector heavyweight CSL gain 1.23 per cent. Ramsay Health Care firmed 1.16 per cent after forecasting a gradual recovery as Covid headwinds abate.
Microba Life Sciences surged 59.09 per cent after medical diagnostics heavyweight Sonic Healthcare invested $17.8 million for a 19.99 per cent stake in the microbiome diagnostics specialist. The alliance will help Microba expand into Australia, New Zealand, Europe and the US. Sonic’s shares edged up 0.32 per cent.
Battery metal miners rose for the first time in several sessions. Sayona Mining gained 2.5 per cent, Core Lithium 0.78 per cent and Lynas Rare Earths 0.84 per cent.
Heavyweight gains included Rio Tinto +1.72 per cent, BHP +1.05 per cent and ANZ +0.51 per cent. Woolworths gained 0.41 per cent. Telstra added 0.37 per cent.
Santos overcame early pressure to advance 0.34 per cent after reporting a gas leak in a pipeline off the coast of WA. The John Brookes platform and a pipeline running to the Varanus Island gas processing facilities were shut down and depressurised after a “small” leak was discovered in a subsea flange.
Property stocks to advance included Waypoint REIT +2.04 per cent, HomeCo Daily Needs +1.95 per cent and Charter Hall Long WALE +0.8 per cent.
Going down
Woodside Energy skidded 2.06 per cent after production guidance missed expectations. The company expects to produce 180-190 million barrels of oil equivalent in its first full year of production since acquiring BHP’s petroleum assets. Analysts expected more following quarterly production of 51.2 MMboe.
The decline was tempered by news the producer has renewed a gas supply agreement with Brickworks for another 11 years from 2025. Brickworks shares firmed 0.84 per cent.
Fast-food operator Collins Foods slumped 18.43 per cent after reporting a sharp decline in half-year profit. Statutory net profit contracted to $11 million from $26.4 million last year. Underlying profit declined 14.2 per cent to $24.8 million as the company battled inflationary headwinds and margin pressure.
Plus-size clothes retailer City Chic Collective fell for a third day since Monday’s disastrous trading update. A 12.84 per cent decline this morning extended the retailer’s loss since Monday beyond 50 per cent.
Gold miners retreated in the wake of a 0.8 per cent slump in the yellow metal overnight. Silver Lake Resources shed 2.63 per cent, De Grey 2.16 per cent and Ramelius 2.02 per cent.
GrainCorp slid 4.29 per cent as its shares traded without the right to the latest dividend.
Other markets
US futures steadied after last night’s tumble. S&P 500 futures were recently ahead one point or 0.03 per cent.
Oil remained under pressure after trading overnight at its weakest since January. Brent crude dipped eight US cents or 0.1 per cent to US$83.81 a barrel.
Gold clawed back US$2.10 or 0.1 per cent of last night’s loss, rising to US$1,742.40 an ounce.
The dollar bounced 0.1 per cent to 66.57 US cents after slumping more than 1 per cent overnight.
