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The share market surged to a new pandemic-era high as rising inflation and falling borrowing costs boosted gold and technology companies.

The S&P/ASX 200 climbed 46 points to 7022.7, its strongest level since February last year, before trimming its advance to 30 points or 0.43 per cent mid-session.

The All Ordinaries rallied 34 points or 0.47 per cent. The broader of the two major benchmarks reached 7280.3, less than 10 points off last year’s pre-pandemic all-time high.

What’s driving the market

The market resumed its uptrend after Wall Street cruised through the first of the week’s major “risk events”. The Nasdaq Composite rallied 1.05 per cent and the S&P 500 added 0.33 per cent after the March consumer price index confirmed a sharp pick-up in inflation. A regulatory pause on Johnson & Johnson’s Covid vaccine over blood clotting issues had little impact.  

“Investors flocked to tech-related stocks and took the well-telegraphed inflation ‘pick-up’ in stride. Markets remain seemingly unfazed by the halt in Johnson & Johnson’s COVID-19 vaccine rollout,” Stephen Innes, Global Market Strategist at Axi, said.

Rate-sensitive tech stocks jumped 1.88 per cent to a seven-week high after Australian bond yields followed US yields lower. The Australian ten-year yield dived six basis points this morning. The WAAAX group of sector leaders all advanced. WiseTech gained 2.68 per cent, Afterpay 2.65 per cent, Altium 2.56 per cent, Appen 0.84 per cent and Xero 1.53 per cent.  

“Investors’ concerns over rising interest rates seem to have taken a breather, reviving demand for high-growth technology stocks in the equity market.  Pandemic winning technology theme seems to be back in action amid subsiding bond yields mania. Tech giants and BNPL stars are pulling the chords of ASX 200 today,” Kalkine Group CEO Kunal Sawhney said.

Gold stocks benefitted from the precious metal’s traditional role as a hedge against inflation. Overnight data showed consumer inflation last month recorded its biggest jump in eight and a half years. The Australian index of gold companies hit a two-month peak as Perseus climbed 7.35 per cent, Ramelius 4.28 per cent and Evolution 4.49 per cent. Sector giant Newcrest added 3.48 per cent.

Going up

While gold and tech stocks saw the biggest returns, bond proxies and miners did the heavy lifting. Goodman Group rose 1.99 per cent, Wesfarmers 1.29 per cent, CSL 0.98 per cent, BHP 0.61 per cent and Rio Tinto 0.56 per cent.  

Macquarie Group and CBA were the best of the financial giants, rising 0.36 and 0.44 per cent, respectively. ANZ shed 0.28 per cent, NAB 0.47 per cent and Westpac 0.16 per cent.

Beleaguered gold miner Resolute bounced 14.89 per cent after the Ghanaian government restored the lease for its Bibiani mine. However, the restoration wss heavily qualified. The government said it does not recognise the sale of the mine to Chinese company Chifeng Jilong Gold. Resolute announced in December that Chifeng had bought the mine for US$105 million. Resolute said it would consider its options.

The prospect of winning a share of the government’s post-pandemic infrastructure splurge lifted builder Cimic 2.93 per cent. Executive Chair and CEO Juan Santamaria told shareholders at today’s AGM the company was well placed to secure work.

“More than $500 billion of tenders relevant to us are to be bid and/or awarded in 2021 and beyond,” he said. “Many of the major packages expected in the year ahead come on the back of our work on earlier phases of the projects. This means we’re ready to go with a proven track record, experienced teams and existing equipment,” he added.

DigitalX – arguably the closest thing the ASX has to a proxy for Bitcoin – surged 21.21 per cent after the cryptocurrency rallied 5.5 per cent overnight to an all-time high US$63,246.

“Bitcoin mania continues to drive crypto lovers crazy ahead of the listing of the largest U.S. cryptocurrency exchange. This is the most-awaited event in the global crypto space and will position digital assets at par with stocks and other traditional assets,” Kalkine’s Mr Sawhney said.

Reddit favourite BrainChip jumped 16.98 per cent on news the company had started volume production of its processor for Artificial Intelligence devices. Production units are expected to be available in August.

Going down

Reopening plays came under mild pressure following the US’s decision to halt the rollout of the Johnson& Johnson vaccine. Star Entertainment Group declined 1.86 per cent, Flight Centre 1.55 per cent, Webjet 1.88 per cent and Qantas 0.85 per cent. 

Fortescue Metals was an outlier among the big three bulk metal producers, falling 0.76 per cent. Telstra fell further from Monday’s eight-month peak, easing 0.72 per cent. Supermarkets Woolworths and Coles retreated 0.35 and 0.13 per cent, respectively. Oil and gas giant Woodside slipped 0.29 per cent.

Other markets

A broadly positive morning on Asian markets saw the Asia Dow rise 0.34 per cent. China’s Shanghai Composite gained 0.41 per cent and Hong Kong’s Hang Seng 1.19 per cent. Japan’s Nikkei dropped 0.38 per cent.

US futures were mixed but flat to mildly lower. S&P 500 futures added less than a point or 0.02 per cent. Dow futures dipped 22 points. Nasdaq futures eased 0.03 per cent.  

Oil extended overnight gains, boosted by an upbeat demand outlook from OPEC and strong Chinese trade data. Brent crude rallied 44 cents or 0.69 per cent to US$64.11 a barrel.

Gold shaved $1.40 or 0.08 per cent off its 0.9 per cent overnight advance, easing to US$1,746.20 an ounce.

The dollar inched up 0.06 per cent to 76.52 US cents.

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