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The share market was on track for its strongest rise in six weeks as the market’s heavyweights largely ignored mixed employment data.

The S&P/ASX 200 recouped yesterday’s loss, plus some more, rising 62 points or 0.84 per cent. This morning’s advance was the index’s largest since a 99-point surge on August 2.

All 11 sectors advanced, with energy and mining stocks leading the way. Woodside, BHP and Macquarie Group were the best of the heavyweights. CBA and CSL also rose.

What’s driving the market

The index briefly gained as much as 70 points before the August jobs report took some of the wind out of the rally. The economy shed 146,300 jobs last month as NSW, Victoria, Queensland and the ACT endured lockdowns. Economists had predicted a smaller hit of around 80,000.

Despite the setback, the unemployment rate dropped to a 13-year low of 4.5 per cent from 4.6 per cent in July as the participation rate fell. The dollar eased 0.18 per cent to 73.27 US cents. The yield on ten-year Australian government bonds trimmed its advance by a basis point to three basis points.

“Labour market changes in New South Wales continued to have a large influence on the national employment and hours worked figures,” ABS head of labour statistics, Bjorn Jarvis, said. “In August, there were big falls in New South Wales in both employment (-173,000) and hours worked (-6.5 per cent).

“Throughout the pandemic we have seen large falls in participation during lockdowns — a pattern repeated over the past few months. Beyond people losing their jobs, we have seen unemployed people drop out of the labour force, given how difficult it is to actively look for work and be available for work during lockdowns,” he added.

The market had built strong momentum ahead of the mid-morning report following solid gains in the US overnight. The S&P 500 rallied 0.85 per cent, its biggest rise in two weeks.

Going up

Energy was the best-performing sector on both sides of the Pacific after oil scored its highest settlement since July. Woodside Petroleum firmed 2.51 per cent, Beach Energy 1.87 per cent, Santos 2.24 per cent and Oil Search 2.36 per cent.

BHP was the best of the mining majors, rising 1.81 per cent as gains in copper and other raw materials helped offset a fresh 2021 low in iron ore. Rio Tinto added 0.2 per cent. Fortescue sagged 0.84 per cent.

Uranium stocks soared after the price of the radioactive metal added to this month’s 40 per cent surge. The Global X Uranium exchange traded fund  (URA) jumped 6.5 per cent in the US overnight to a level last seen in 2014.

Yellowcake prices have surged due to seasonal restocking and heavy buying by the Sprott Physical Uranium Trust. Several Australian miners and explorers have more than doubled in value this month

Delecta climbed 27.27 per cent this morning to a decade high. Toro Energy climbed 23.81 per cent to a level last visited in 2017. Valor Resources firmed 15 per cent, Alligator Energy 18.99 per cent and 92 Energy 9.46 per cent.

Telstra shares rose 1.4 per cent to a four-year peak after the telco announced plans to strip out $500 million in fixed costs, extend 5G coverage to 95 per cent of Australians and expand its regional coverage. The plan was announced to investors this morning as the T25 strategy to deliver growth.

Myer‘s recovery continued with a return to profit lifting the share price 13.73 per cent to the highest in almost two years. The department store swung to full-year net profit of $51.7 million after losing $13.4 million last year. Total sales increased 5.5 per cent.

Wesfarmers gained 0.64 per cent after increasing its offer for pharmaceutical wholesaler Australian Pharmaceutical Industries (API). The retailer raised its bid to $1.55 per share from $1.38, prompting the API board to state its intention to recommend the offer in the absence of a superior bid. API shares soared 16.54 per cent to $1.48.  

Going down

Afterpay eased 0.15 per cent as growth stocks underperformed cyclicals. WiseTech dropped 2.23 per cent, Nanosonics 1.88 per cent, Appen 2.98 per cent and EML Payments 2.33 per cent.

Brambles fell for a third session since Tuesday’s poorly-received forward outlook, shedding 0.68 per cent.

Engineering services provider Worley lost 2.4 per cent after major shareholder Jacobs Engineering sold its stake. Jacobs sold its 9.85 per cent holding through a block trade agreement with Citigroup.

Domain Holdings eased 0.1 per cent after acquiring property data business Insight Data Solutions for $60 million in cash. The company said the acquisition extended its reach into the government sector. IDS expected to deliver revenue of $7 million this financial year.

Among stocks trading ex-dividend, Seven Group gave up 0.45 per cent, SkyCity Entertainment 2.04 per cent and Spark NZ 2.94 per cent.

Other markets

Sentiment in Asia was undermined by financial problems at the massive Chinese Evergrande property group. A 7.1 per cent tumble in Evergrande helped pull Hong Kong’s Hang Seng down 1.23 per cent. The Asia Dow shed 0.21 per cent and Japan’s Nikkei 0.46 per cent.

China’s Shanghai Composite and S&P 500 futures were both unchanged.

A rally in oil continued. Brent crude improved 15 US cents or 0.2 per cent to US$75.61 a barrel.

Gold bounced US$1.80 or 0.1 per cent to US$1,796.60 an ounce.

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