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Aussie shares rose for a second day as gains in mining and tech stocks outweighed mild declines in the major banks.

The S&P/ASX 200 advanced 14 points or 0.2 per cent by mid-session. Trading volumes were constrained by a US market holiday overnight.

Rio Tinto and JB Hi-Fi rose following trading updates. Redbubble lost almost a quarter of its market value after issuing a downbeat full-year outlook.

What’s driving the market

Deprived by a Wall Street holiday of their usual leads, traders took their cues from gains in Europe. The pan-European Stoxx 600 rallied 0.7 per cent overnight. The German benchmark edged up 0.32 per cent. Britain’s FTSE 100 advanced 0.91 per cent.

Asian markets added to yesterday’s gains. The Asia Dow climbed 0.58 per cent. Hong Kong’s Hang Seng tacked on 0.05 per cent, Japan’s Nikkei 0.67 per cent and China’s Shanghai Composite 0.06 per cent.

Equity markets outside the US have taken advantage of a temporary break from American inflation and rates worries, but analysts warned the respite may be brief.

“European stocks have made small gains today while US traders take the day off, but the lull in markets is unlikely to last,” IG market analyst Chris Beauchamp said.

“The gains will be swiftly reversed if US traders come back [tonight] in a similarly bearish mood to that prevailing on Friday.”

Global markets have struggled for traction this year. Wall Street and the ASX have yet to log a weekly gain for 2022. The rate-sensitive Nasdaq Composite will resume trade tonight on a three-week losing streak.

US equity futures inched higher this morning. Dow and S&P 500 futures both rose just under 0.1 per cent.

Back home, confidence in the economic outlook collapsed last week as Covid case numbers surged, according to an ANZ-Roy Morgan weekly survey. The consumer sentiment index dived 7.6 per cent to 97.9, the lowest reading since October.  

“We don’t think the economy is as weak as these data might suggest, with the shock of the Omicron surge and strains on testing capability the key drivers of the fall rather than underlying economic conditions,” ANZ’s head of Australian economics, David Plank, said.

“But the result highlights that concerns about COVID have the potential to significantly impact the economy if they linger.”

Going up

Rio Tinto rose 0.35 per cent despite shipping less iron ore last year. The miner reported a 3 per cent decline in Pilbara shipments versus 2020. The company attributed the setback to above-average rainfall, cultural heritage management and delays in bringing new production on-line.   

Bauxite, aluminium and copper production also fell. The miner hopes to maintain or increase output this financial year. Iron ore guidance indicated an increase of up to 4 per cent in shipments.

A 62.6 per cent year-on-year increase in first-half online sales helped offset a 1.6 per cent dip in total sales at JB Hi-Fi. The retailer reported “strong” sales momentum through the half as consumers bought electronics and home appliances. Online sales grew to 22.7 per cent of total sales during lockdowns in eastern States. Shares in the company gained 7.1 per cent.  

A fourth-quarter bump in margins helped lift Ampol 1.64 per cent. The fuel refiner said the Lytton Refiner Margin almost doubled to US$11.24 a barrel from US$6.76 in the third quarter. Refinery production increased to 1,585 ML from 1,565 ML the previous quarter.

CIMIC firmed 1.04 per cent after announcing two contract wins. A subsidiary was selected to deliver the next stage of the Augusta Highway Duplication in South Australia and to help with BHP’s port debottlenecking project at Port Hedland. The projects will generate approximately $232 million in revenue.

In the tech space, Novonix put on 7.89 per cent, Life360 5.14 per cent and Appen 4.17 per cent. HotCopper favourite BrainChip had a record close within reach after gaining 17.91 per cent.

A strong morning for lithium miners saw Liontown Resources add 8.13 per cent, Allkem 3.79 per cent and Pilbara Minerals 3.06 per cent.

A profit upgrade lifted cloud computing firm Data#3 12.91 per cent. The tech firm said first-half net profit before tax was expected to be “slightly ahead” of the top end of guidance provided in October. The audited result will be released next month.

At the speculative end of the market, Zuleika Gold jumped 70 per cent after raising $3 million at a 50 per cent premium to its last closing price from prominent WA investor Mark Creasy.

Explorer Charger Metals flew up 36.55 per cent to an all-time high. Recently-listed Larvotto Resources also hit a record, rising 24.32 per cent.

Going down

Online marketplace Redbubble tumbled 22.41 per cent after reporting a pandemic sales bump from mask sales faded last year. First-half Marketplace revenues declined 18 per cent year-on-year to $288 million, according to unaudited preliminary figures. Excluding masks, revenues declined 5 per cent.

Gross profit contracted 25 per cent to $108 million. The company expects full-year revenues to be “slightly below” last year’s result.

Home food delivery service Marley Spoon appeared to suffer collateral damage, falling 7.29 per cent as traders extrapolated Redbubble’s outlook to other pandemic winners.

The big four banks eased with a modest drop in long-term lending rates. CBA dipped 0.08 per cent, ANZ 0.21 per cent, NAB 0.31 per cent and Westpac 0.54 per cent.

Other markets

Oil continued to test levels last seen in 2018. Brent crude rallied 14 US cents or 0.16 per cent to US$86.62 a barrel.

Gold remained in a holding pattern, lately up US$2.70 or 0.15 per cent to US$1,819.20 an ounce.

The dollar firmed 0.12 per cent to 72.2 US cents.

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