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Aussie shares hit a pandemic-era high as a rebound in commodity prices boosted the heavyweight miners and Victoria recorded four new local coronavirus cases.

The S&P/ASX 200 surged 74 points or 1.05 per cent towards its sixth gain in seven sessions. The index hit a morning peak at 7183.4, just shy of last February’s intraday peak of 7197.2.

Rio Tinto, BHP and Woodside Petroleum spearheaded the charge following strong gains in industrial metals and crude. Afterpay and utilities were among the drags as bond yields leaped higher.

What’s driving the market

The materials sector climbed almost 2 per cent to its highest in more than a week after strong US economic data bolstered optimism about the outlook for raw materials. Copper, aluminium and nickel gained between 2.4 and 3.5 per cent overnight on the London Metal Exchange. US crude hit its highest level since October 2018.

Miners rebounded after backing off record levels earlier this month as China intensified its war on surging commodity prices. BHP bounced 3.02 per cent. Rio Tinto rose 2.91 per cent, Fortescue Metals 0.56 per cent and South32 5.63 per cent. Nickel miner IGO gained 4.93 per cent, Whitehaven Coal 4.56 per cent and Mineral Resources 4.33 per cent.

Buying interest was sharpened by the looming month-end. Bonus-dependent institutional investors have an incentive to push the index as high as they can before Monday’s close. The ASX 200 has put on around 2 per cent this month and was on track for its 13th advance in the 14 months since the pandemic bottom.

Also helping sentiment was news Victoria record just four new local Covid-19 cases in the last 24 hours as the state returned to lockdown. The drop in cases from 11 the previous day raised hopes the current breakout can be contained.

“The local share market appears to be demonstrating considerable resilience, weathering reports of fresh lockdown introduced in Victoria as authorities struggle to control a highly infectious outbreak. It seems that investors have gradually learned to live with breakouts, considering the recent surge in cases as a temporary or transitory phase,” Kalkine Group CEO Kunal Sawhney said.  

Overnight, the S&P 500 inched up 0.12 per cent as strong GDP and labour market data boosted industrials and other sectors tied to the economy. The Dow put on 0.41 per cent.

“Another batch of economic data bolstered investors’ sentiments, confirming the US economic recovery from the COVID-19 pandemic is moving well on track,” Mr Sawhney said. “Equity bulls cheered the US economy comeback as new filings for jobless benefits slid lower for the fourth straight week and the economy posted robust GDP growth of 6.4% in the first quarter, unrevised from the initial government estimate.”

US futures strengthened ahead of the last session before the Memorial Day long weekend. S&P 500 futures rallied 12 points or 0.3 per cent.

Going up

Industrial giants Transurban and Brambles helped lift the sector to its highest in more than two weeks amid optimism about the improving outlook for the global economy. Toll road operator Transurban climbed 2.12 per cent. Supply-chain logistics specialist Brambles gained 1.49 per cent.

Woodside Petroleum advanced 1.77 per cent as the energy sector pushed further off six-month lows. Oil Search put on 2.88 per cent, Santos 2.45 per cent and Beach Energy 1.39 per cent.

The big four banks put on between 0.88 and 1.1 per cent.

A profit upgrade propelled poultry king Ingham’s 10.03 per cent to the top of the index. The company said full-year earnings “may exceed” and statutory profit “may materially exceed” the market consensus.  

Real estate listings firm Domain Holdings rose 4.08 per cent after confirming it was part of a consortium exploring acquiring an interest in the property settlement platform PEXA. Link Administration, which holds a 44.2 per cent in the target, rose 4.05 per cent.  

Tabcorp jumped 2.67 per cent to a three-year high after BetMakers lobbed a $4 billion bid for the group’s Wagering and Media business. Tabcorp said its board had not yet formed a view on the offer, which consisted of around $1 billion in cash and $3 billion in shares. BetMakers shares dived 11.56 per cent.

Going down

A jump in bond yields weighed on growth stocks. The yield on ten-year Australian government bonds bounced almost six basis points this morning to 1.643 per cent following a similar move in the US overnight. WiseTech fell 2.19 per cent, Nearmap 2.17 per cent and Afterpay 1.11 per cent. Nuix slumped 4.51 per cent after announcing it had parted ways with co-founder Tony Castagna.

The utilities sector, which attracts funds when yields weaken, was the morning’s worst performer, falling 0.43 per cent. APA Group shed 0.65 per cent. Mercury NZ lost 5.61 per cent.

A slump in global almond prices knocked grower Select Harvests‘ half-year profit down 92.5 per cent to $1.3 million. Earnings tumbled 62.9 per cent despite a 21.5 per cent increase in the size of the company’s crop. The share price slid 5.2 per cent.

“As anticipated, lower global almond prices have negatively impacted earnings, delivering a first half financial result well below recent prior periods,” Paul Thompson, Managing Director, said. “The company remains focused on factors within its control such as almond volume, quality and operational costs.”

CSR dropped 5.44 per cent as it traded without the right to a dividend.

Other markets

The Asia Dow firmed 1.24 per cent. China’s Shanghai Composite advanced 0.02 per cent, Hong Kong’s Hang Seng 0.28 per cent and Japan’s Nikkei 2.03 per cent.

Oil developed good momentum overnight and continued higher this morning. Brent crude rallied 19 cents or 0.27 per cent to US$69.39 a barrel.

Gold dipped $1.10 or 0.06 per cent to US$1,897.40 an ounce.

The dollar inched up 0.02 per cent to 77.44 US cents.

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