The share market pushed towards a third straight weekly advance as gains in miners helped offset a six-month low in oil and a weak trading update from Afterpay’s US parent company.
The S&P/ASX 200 climbed 26 points or 0.37 per cent by mid-session. The advance put the index on track for a weekly gain of almost 60 points.
The gold sub-sector scaled a five-week high. Consumer and healthcare stocks also rose. Energy was the biggest drag as global recession worries weighed on crude prices.
What’s driving the market
The ASX 200 has drifted into a sideways trading pattern since Tuesday while investors await a catalyst to either smash through technical resistance at the 7000 level or retrace. The index pushed as high as 7007 this morning before easing to 7001.
“It may cross the 7,000 level on an intraday basis, but it is to be seen if the ASX benchmark sustains above that mark on a closing basis, which will signal a further uptrend in the market,” Kunal Sawhney, chief executive of research group Kalkine, said.
Wall Street offered little direction, with investors reluctant to add or subtract from positions until after the July jobs report. The S&P 500 and Dow eased 0.08 and 0.26 per cent, respectively. Strength in Big Tech lifted the Nasdaq Composite 0.41 per cent.
Tonight’s US employment data are expected to show a slowdown in employment growth as rising interest rates give hirers pause. The median forecast among economists is for an increase in total employment of 250,000, versus a gain of 372,000 in June.
The report is this week’s most significant in terms of the outlook for interest rates. A strong result might tip the balance in favour of a larger hike next month. Alternatively, a weak result would allow the Federal Reserve to take its foot off the pedal.
Gold’s strongest close in a month kept local miners on the upswing. The S&P/ASX Gold index climbed 2.4 per cent.
The yellow metal regained US$1,800 an ounce overnight following China’s hostile response to US House Speaker Nancy Pelosi’s visit to Taiwan. China encircled the island with military exercises after Pelosi departed, and fired several ballistic missiles nearby.
“The aggressive tone emanating out of Beijing in response to Pelosi’s visit to Taiwan has made for a classic safe haven play in recent sessions, with gold and Treasuries rising in tandem with the U.S. dollar and the Japanese Yen,” Han Tan, chief market analyst at Exinity Group, told Kitco News.
Ramelius Resources was the pick of the local gold miners, rising 6.22 per cent. De Grey put on 5.91 per cent, Silver Lake Resources 3.98 per cent and Sandfire 3.42 per cent. Industry heavyweight Newcrest gained 1.13 per cent.
Core Lithium firmed 5.37 per cent after announcing former Rio Tinto executive Gareth Manderson as its new CEO. Manderson has 28 years of experience in the mining sector, including several roles at Rio.
A partnership with German automotive giant BMW AG boosted European Lithium 10.98 per cent. The firms signed a non-binding memorandum of understanding for the Austria-focussed ASX-listed miner to supply BMW with battery-grade lithium hydroxide.
Besides miners, growth stocks provided the morning’s best returns. Novonix surged 11.44 per cent, Life360 5.22 per cent and PointsBet 6.45 per cent.
The bulk-metal majors rallied as Chinese iron ore price improved 0.6 per cent this morning. Rio Tinto gained 1.65 per cent. Fortescue Metals firmed 1.19 per cent and BHP 1.52 per cent.
Other heavyweight gains included Wesfarmers +1.17 per cent, Woolworths +1.26 per cent and Telstra +0.88 per cent.
GQG Partners edged up 0.16 per cent after reporting a US$2.2 billion increase in funds under management last month as equity markets recovered. Total FUM increased to US$88.9 billion from US$86.7 billion in June.
Afterpay’s parent company Block was the biggest drag on the index after reporting payments volumes short of Wall Street estimates. Shares in Block’s Australian listing sank 5.72 per cent, broadly in line with US losses in extended trade this morning.
Revenue and profit were dented by weak consumer demand and volatility in cryptocurrencies. The fintech took a US$36 million impairment on Bitcoin.
The energy sector has shown considerable resilience to deteriorating prices, but sank 2 per cent today after US crude dropped below US$90 a barrel.
“Crude oil fell sharply as recessionary fears drove concerns of weaker demand. Brent crude has now given up all the gains triggered by Russia’s invasion of Ukraine in February,” ANZ’s senior commodity strategist Daniel Hynes said.
Beach Energy shed 3.09 per cent, Woodside 2.3 per cent and Santos 1 per cent.
Coal miners felt the heat from a 2.2 per cent decline in thermal coal prices. Whitehaven gave up 3.7 per cent. New Hope lost 3.97 per cent.
Japan’s Nikkei index was the pick of the major Asian markets, rising 0.65 per cent. The Asia Dow gained 0.41 per cent. China’s Shanghai Composite turned neutral. Hong Kong’s Hang Seng dropped 0.21 per cent.
US futures gained momentum as the morning wore on. S&P 500 futures were recently ahead 12 points or 0.3 per cent.
Oil overcame early weakness, rebounding off a six-month low. Brent crude rallied 37 US cents or 0.4 per cent to US$94.49 a barrel.
Gold eased 60 US cents or 0.03 per cent to US$1,806.30 an ounce.
The dollar inched up 0.1 per cent to 69.66 US cents.