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The share market recovery extended into a fourth session as gains in commodity exporters and defensive sectors outweighed declines in consumer and tech stocks.

The S&P/ASX 200 climbed 21 points or 0.31 per cent by mid-session.

Rebounds in crude oil and iron ore helped the market shrug off soft leads from Wall Street. The advance lifted the index to its highest in more than two weeks.

What’s driving the market

Recoveries in key exports helped offset a mild reversal in the US as last week’s fierce rebound lost momentum. The S&P 500 dipped 0.3 per cent overnight as strengthening commodity prices and robust economic data revived concerns that interest rates will have to go much higher to contain inflation.

Market commentators speculated that equities will be cushioned this week by the looming end of the quarter overseas and the conclusion of the financial year here.

“There is a clear lack of conviction by investors with light trading volumes favouring the notion of an exhausted market with big declines set to be recorded this quarter, notwithstanding the outsized gains logged last week,” NAB’s Rodrigo Catril said.

Month end rebalancing plays to the view that some buying should be seen over coming days given the need for portfolios to increase their equity exposure after the big losses during the quarter (S&P 500 -14% qtd), then again may be the gains recorded last week were part of this flow.”

Consumer sentiment improved last week but remained near two-year lows. The ANZ-Roy Morgan sentiment index climbed 3.7 per cent to 84.7, still a long way below the 100-point ‘neutral’ level.

Going up

Energy ranked high among the pick of the sectors on both sides of the Pacific as crude steadied ahead of this month’s OPEC+ meeting. Brent crude rose US$1.32 or 1.2 per cent this morning towards a third straight gain. Recoveries in iron ore and copper helped miners.

Woodside Energy climbed 3.13 per cent to a two-week high after solid US data overnight soothed concerns about the global economy and energy demand. Santos firmed 2.57 per cent. Beach Energy added 5.3 per cent.

The resumption of face-to-face teaching in Beijing and a zero-Covid day in Shanghai helped lift iron ore prices 5.3 per cent on the Dalian Commodity Exchange. Fortescue Metals rallied 3.86 per cent, BHP 2.57 per cent and Rio Tinto 1.81 per cent.

Gold miner Newcrest bounced 2.81 per cent from near a five-month low. Northern Star rose 5.7 per cent. Coal miners New Hope and Whitehaven gained 5.11 and 3.14 per cent, respectively.

Utilities was the morning’s standout as APA Group rallied 2.73 per cent and AGL put on 3.05 per cent. Origin tacked on 2.7 per cent.

A recovery in European trade helped KFC and Taco Bell franchisee Collins Foods increase full-year underlying profit 25 per cent. Revenues improved 11.1 per cent, thanks in large part to the firm’s German and Dutch franchises. Australian business expanded through greater demand for home deliveries. The share price climbed 11.63 per cent.

Salmon farmer Tassal Group soared 13.6 per cent to $4.51 after knocking back an improved takeover offer from Cooke Inc. The company rejected the Canadian seafood business’s “non-binding, indicate, incomplete and condition proposal” to acquire the firm at $4.85 per share. The board said a five-cent improvement on a previous offer still did not reflect the fundamental value of the business and was not in the best interests of shareholders.

Lab services provider HRL Holdings soared 70.73 per cent on takeover interest from industry giant ALS. The HRL board has offered its suitor exclusive access to carry out due diligence until July 20. ALS shares eased 2.26 per cent.

Fuel refiner Ampol firmed 1.78 per cent on news the sale of its Gull business in New Zealand to Allegro Funds for NZ$509 million was now unconditional.

Going down

Tech and consumer stocks bore the brunt of the selling as borrowing costs crept higher on fixed-income markets. Megaport slid 6.38 per cent, BrainChip 4.05 per cent and WiseTech 2.13 per cent. Retailer City Chic Collective sagged 8.04 per cent.

Travel stocks gave back some of yesterday’s gains. Flight Centre eased 3.32 per cent, Corporate Travel Management 3.44 per cent and Webjet 2.43 per cent.  

Imugene, another of yesterday’s winners, reversed 9.38 per cent. Rate-sensitive payments firms were back under the pump. EML dropped 7 per cent, Zip Co 5.83 per cent and Block 4.29 per cent.

BWX plunged 40.17 per cent after warning of a sharp contraction in full-year earnings. The beauty and wellness company expects underlying earnings to drop 59 per cent. The firm will bolster its capital by raising up to $23.2 million at 60 cents, barely half the last closing price of $1.17.

Other markets

US futures slid with Asian markets. The Asia Dow wilted 0.42 per cent as China’s Shanghai Composite shed 0.5 per cent and Hong Kong’s Hang Seng gave up 1.15 per cent. Japan’s Nikkei was broadly steady, down 0.06 per cent.

S&P 500 futures wilted 15 points or 0.38 per cent.

Gold eased 60 US cents or 0.03 per cent to US$1,824.20 an ounce.

The dollar was unchanged at 69.2 US cents.

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