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Gains in tech and defensive stocks helped the Australian market hang on to its biggest one-day advance in ten weeks.  

A two-day rebound in the S&P/ASX 200 stalled this morning as the benchmark index gave up most of a 41-point rally to reach mid-session just four points or less than 0.1 per cent ahead. The benchmark index charged 223 points or 3.9 per cent yesterday to break a three-day losing streak and deliver the market’s best single-day return since late March.

Yesterday’s bull run largely pre-empted a third straight advance on Wall Street overnight as investors welcomed strong economic data, stimulus plans from the White House and progress on treatments for COVID-19.  The S&P 500 rose 58 points or 1.9 per cent.

The heavyweight mining and bank stocks usually set the tone on the ASX, but this morning acted as drags as investors rotated into tech stocks and traditional defensives. Technology,  consumer staples and real estate stocks set the pace, supported by the industrial and health sectors.

Biotech Clinuvel and the A2M Milk Company were the index’s best performers, rising 6.8 per cent and 6 per cent, respectively. Fisher & Paykel Healthcare put on 4.9 per cent, Estia Health 3.3 per cent, Aurizon 3.3 per cent, Metcash 3.1 per cent and Spark New Zealand 2.8 per cent. Supermarkets Woolworths and Coles added 1.1 per cent and 0.1 per cent, respectively. Vicinity Centres gained 3.3 per cent, Transurban 3.1 per cent and Abacus Property Group 3 per cent.

The top eight tech stocks by market capitalisation advanced, led by WiseTech +4.3 per cent, Computershare +2.9 per cent and Xero +3.1 per cent. Afterpay hit a new record with a rise of 1.3 per cent.

The financial sector bounced hard yesterday but this morning eased for the fifth time in six sessions. CBA eased 0.2 per cent, ANZ 1.6 per cent, NAB 1.3 per cent and Westpac 1.1 per cent.

The big miners opened higher but faded as the morning wore on. BHP slid 1 per cent, Fortescue 1.9 per cent, Rio Tinto 1.4 per cent and Newcrest 0.7 per cent.

Kerry Stokes’ debt-laden media company Seven West has seen heavy trading over the last fortnight amid reports of interest from private equity, doubling in value last week before once again selling off.  Shares sank 8 per cent this morning to 11.5 cents. The company hit a low of 6 cents in early April.

Asian markets retreated after China took radical action to contain a second wave of coronavirus infections. More than a thousand flights in and out of Beijing were cancelled this morning as the city raised its emergency response to Level 2. The Shanghai Composite and Hong Kong’s Hang Seng both fell 0.2 per cent. Japan’s Nikkei shed 0.7 per cent. S&P 500 index futures dropped 17 points or almost 0.6 per cent.

Oil gave back more than half of its overnight advance. Brent crude declined 74 cents or 1.8 per cent to $US40.22 a barrel. Gold skidded $4.50 or 0.3 per cent to $US1,732 an ounce.

The dollar retreated 0.38 per cent to 68.58 US cents.

What’s hot today and what’s not:

Hot today: Shares in Latin Resources (ASX:LRS) doubled in value after the junior explorer announced a “transformational” joint venture deal with an Argentinian investor. Investment company Integra will spend up to $1.4 million under a deal to explore Latin’s Catamarca lithium concession in Argentina. Latin will be free-carried through initial exploration. Integra has an option to take a 10 per cent stake in Latin after due diligence. The LRS share price shot from 0.3 cents to 0.6 cents.

Not today: Investors in Megaport (ASX: MP1) have had plenty to crow about following the data company’s rebound from a nine-month low in March to an all-time high last week. The share price more than doubled in three months from near $6 at the pandemic lows to $15.50. Some of the heat came out of the rally after the company confirmed a major US investor had sold most of its stake. Digital MP, a subsidiary of NYSE-listed Digital Realty sold 7.7 million shares at $13.36, slashing its stake to 2 million. The share price sank 3.1 per cent to $13.56.  

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