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The share market climbed off a six-week low after northern-hemisphere markets rebounded from last week’s plunge.
The S&P/ASX 200 rallied 41 points or 0.57 per cent by mid-session. With three hours left to trade, the index was on track for a monthly loss of around 2.8 per cent.
Resource stocks led the advance after a pullback in the US dollar aided commodity prices. Harvey Norman and Adbri sagged as the interim reporting season drew to a close.
What’s driving the market
Aussie shares joined a regional rebound following overnight gains in US and European stocks. The S&P 500 bounced 0.31 per cent from its worst week of the year. The pan-European Stoxx 600 gained 1.07 per cent.
Up in Asia, the Asia Dow put on 0.46 per cent, China’s Shanghai Composite 0.4 per cent, Hong Kong’s Hang Seng 0.79 per cent and Japan’s Nikkei 0.44 per cent.
Today’s recovery comes at the end of a challenging month during which a run of stronger-than-expected inflation and economic data forced investors to reassess the likely top of this rates cycle. Equity markets were coming off an exceptionally strong start to the year.
February “will go down in history as the month where the market pulled back to digest a very strong rally you saw at the end of December into most of January,” Adam Sarhan, CEO of 50 Park Investments, told CNBC. “This is a pullback month, it’s a rest month, and that’s good as long as support is defended and support holds, which is last week’s low.”
Worries about an unexpected collapse in retail sales at the end of last year were salved by news of a rebound last month. Total retail turnover increased 1.9 per cent, reversing some of a 4 per cent slump the previous month. Economists anticipated a smaller recovery of 1.5 per cent.
“Looking through this volatility shows that turnover is at a similar level to September 2022, and on average, growth has been flat over the past few months,” Ben Dorber, ABS head of retail statistics, said.
Going up
Mining stocks rebounded with US dollar-denominated metal prices after the greenback pulled back from a seven-week peak. Gold rallied overnight for the first time in six sessions. Copper, nickel and aluminium rose on the London Metal Exchange.
De Grey rallied 5.41 per cent. West African Resources gained 4 per cent. Capricorn Metals added 3.88 per cent.
Among the heavyweights, Fortescue Metals put on 2.62 per cent, Newcrest 1.33 per cent and Rio Tinto 1.23 per cent,. BHP added 0.99 per cent.
Record production at Indonesia-focussed Nickel Industries lifted full-year revenues 88.4 per cent to US$1.207 billion. Profit expanded 15.3 per cent to US$159 million. The share price rallied 2.86 per cent.
Payments firm Tyro edged up 0.92 per cent after posting its first profitable result as a listed company. The company reported a first-half statutory net profit of $1.1 million and positive free cash flow of $0.6 million.
Mesoblast firmed 4.84 per cent after paring its half-year loss to $41 million from $48.5 million in the prior corresponding period. The biotech had $67.6 million in cash at the end of December.
Going down
Harvey Norman sank 10.82 per cent after warning of a 10.2 per cent sales decline at its Australian franchises last month compared to the same period last year. First-half net profit eased to $365.9 million from $430.9 million in the prior corresponding period.
Adbri dropped 6.52 per cent after scrapping its final dividend and warning costs headwinds will persist this year. The construction materials producer reported a fall in first-half profit to $102.5 million from $116.7 million in the prior corresponding period.
NextDC shed 2.59 per cent after reporting a first-half loss and a substantial increase in full-year spending. The data centre-as-a-service provider swung to a loss of $2.78 million from a profit of $10.26 million in the prior corresponding period. The company forecast full-year revenues towards the top of previous guidance but raised its capital expenditure outlook from $380-$420 million to $620-$670 million.
Gambling group PointsBet slumped 23.02 per cent to a near three-year low after its first-half loss blew out to $178.2 million. Group revenues increased 28 per cent. Turnover lifted 14 per cent.
BNPL junior Sezzle dipped 1.44 per cent after reporting a full-year net loss of US$38.1 million, an improvement on a US$75.2 million loss in 2021. Total income lifted 16.2 per cent last quarter to a record $56.2 million.
Surging European energy costs and weaker metal prices helped drag gold and copper miner Sandfire to a first-half net loss of $27.1 million. The miner reported record sales revenues of $431.7 million. The share price declined 1.9 per cent.
Other markets
US futures built on last night’s reversal. S&P 500 futures climbed ten points or 0.25 per cent.
Brent crude edged up nine US cents or 0.1 per cent to US$82.13 a barrel.
Gold was broadly steady, down 10 US cents or less than 0.01 per cent to US$1,824.80 an ounce.
The dollar bounced 0.12 per cent to 67.48 US cents.
