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The share market built towards a second straight weekly advance as upbeat US trading updates helped beaten-down retail stocks rebound.

The S&P/ASX 200 climbed 60 points or 0.84 per cent by mid-session. The rise put the index on track for its highest close in a week and a half.

Retailers, energy providers and miners led, with support from the heavyweight banking sector. Data sourcing firm Appen sank 21.5 per cent after Canadian suitor Telus abruptly abandoned takeover talks.

What’s driving the market

Tentative optimism crept back into financial markets overnight as Wall Street’s main indices moved closer to ending their worst run of weekly losses in decades. The Dow climbed 1.61 per cent, extending its gain for the week to 4.4 per cent.

The advance placed the blue-chip average on the verge of breaking an eight-week losing streak, its longest since the Great Depression. The S&P 500 and Nasdaq Composite moved towards ending seven-week losing runs with gains of 1.99 and 2.68 per cent, respectively.

Upbeat trading updates from retailers Macy’s, Dollar Tree and Dollar General helped convince traders the outlook for consumer spending was not as bleak as cost warnings from Walmart and Target last week implied.

“The major Wall Street indices closed on a strong note last nightfollowing a robust set of quarterly earnings and encouraging forecasts from retailers such as Macy’s and others,” Kunal Sawhney, chief executive of research group Kalkine, said.

“Macy’s shares surged higher after it raised its profit forecast for the year following a solid first-quarter financial report. Discount retailers Dollar General and Dollar Tree also vaulted strong gains after reporting solid earnings and sharing positive forecasts with investors.”

The consumer discretionary sector was among this morning’s best ASX performers as US retail optimism fed into the ASX. A report today showed April retail sales increased 0.9 per cent from the month before, broadly in line with expectations.

The tech sector took its cues from the Nasdaq’s leading role in the US. Energy stocks were lifted by a 3 per cent increase in crude.

“My favourite market at the moment is the energy sector,” Clifford Bennett, chief economist at ACY Securities, said. “Expect Oil and Gas prices to continue to climb. The combination of actual loss of supply and the increasing refusal to accept supply from Russia will see these commodities move considerably higher.”

Today’s advance stalled just below 7200, as have previous rallies over the last week and a half. The index topped out at 7196.7 and was back near 7160 by lunchtime.

“There’s clearly supply around 7200 on the ASX 200,” City Index senior market analyst Matt Simpson said. “Yesterday was also the worst day in five for the ASX 200, and were it not for tech stocks rising (the only sector to do so) it could have been worse,” he added.

Going up

Retailers pared a losing week. Conglomerate Wesfarmers rallied 1.04 per cent. Online clothing store City Chic Collective firmed 3.54 per cent.

JB Hi-Fi gained 2.91 per cent. Solomon Lew’s Premier Investments added 1.05 per cent and Harvey Norman 0.58 per cent.

The renamed Woodside Energy was the best of the heavyweights, rising 3.33 per cent. Most of the bulk metal majors bounced back from yesterday’s ‘China slowdown’ slump. Rio Tinto tacked on 2.36 per cent and BHP 2.15 per cent. Fortescue Metals eased 0.45 per cent.

Lithium miners provided some of the morning’s best performers. Liontown Resources improved 4.69 per cent, Pilbara Minerals 4.45 per cent and Allkem 3.19 per cent.

Also notably strong: online wagering group PointsBet +10.8 per cent, Afterpay owner Block +5.96 per cent and uranium miner Paladin +5.59 per cent.

Infomedia climbed 4.95 per cent to $1.70 after another suitor joined the bidding war for the Australian data analytics provider. US tech investment firm Battery Ventures offered $1.75 per share, topping a previous proposal from TA Associates and Viburnum Fund.  

Going down

Appen went from rooster to feather duster, plunging 21.52 per cent after a Canadian suitor walked away and the tech darling revealed it was relying on a strong second half to hit its revenue targets. Telus International broke off takeover negotiations last night after news of negotiations leaked.

Appen’s shares slumped briefly below pre-bid prices as the company faced shareholders at today’s AGM. CEO Mark Brayan said year-to-date revenue was lower than the prior corresponding period, but growth in the order book indicated the second half would improve.

Traditional defensives met mild selling pressure as traders rotated into pockets of the market with stronger recovery prospects. Treasury Wine Estate dipped 1.33 per cent, Coles 1.25 per cent and A2 Milk 1.16 per cent.

CSR dropped 4.29 per cent as its shares traded ex-dividend.

Other markets

Hong Kong shares spearheaded a strong morning on Asian markets. The Hang Seng surged 3.04 per cent. The Asia Dow added 1.56 per cent, China’s Shanghai Composite 0.73 per cent and Japan’s Nikkei 0.68 per cent.

US futures retreated as after-hours updates from Gap and Costco disappointed. S&P 500 futures dropped nine points or 0.2 per cent.

Gold added to last night’s slender gain as the US dollar fell. The yellow metal climbed US$5 or 0.27 per cent to US$1,852.60 an ounce.

Brent crude firmed 16 US cents or 0.14 per cent to US$114.33 a barrel.

The dollar moved further above 71 US cents, rising 0.45 per cent to 71.3 US cents.

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