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The S&P/ASX 200 traded briefly above 7000 after oil fell to a six-month low and upbeat US economic data soothed global recession worries.
The Australian benchmark touched a seven-week high of 7021 before shaving its advance to 12 points or 0.18 per cent at 6988.
Gains in tech stocks, banks and industrials outweighed declines in energy providers, miners and supermarkets.
What’s driving the market
Unexpectedly strong US economic data helped Wall Street’s main indices recoup two nights of losses. The S&P 500 bounced 1.56 per cent. Trading updates from PayPal and Moderna helped lift the Nasdaq Composite 2.59 per cent.
“A thumping earnings report from Moderna (+16.27%) before the market opened, set the day’s bullish tone, supported by an earnings beat from Paypal that propelled its shares 9.60% higher. In economic news, a rebound in the ISM non-manufacturing PMI eased fears around an economic slowdown,” Tony Sycamore, market analyst at City Index, said.
Good news for the US economy appeared to be once again good news for the market, reversing a recent trend whereby investors recently embraced weak data that might slow the pace of interest rate hikes. With recession worries top of mind, stocks soared as the all-important services sector expanded faster than expected.
Inflation concerns were soothed by a drop in prices paid by businesses to the lowest since February. A decline in energy prices also helped.
Crude oil fell to levels last seen in February amid worries about weak demand. Brent crude settled US$3.76 or 3.7 per cent lower at US$96.78 a barrel. The US benchmark slid US$3.76 or 4 per cent to US$90.66.
The declines came after the OPEC+ cartel agreed to a slender increase in monthly production of 100,000 barrels. The US Energy Information Administration said US crude supplies increased by 4.5 million barrels last week at a time when national stockpiles were expected to fall.
Going up
The tech sector touched its highest level since May as confidence continued to return after the sector lost almost half of its value in eight months. Afterpay’s US parent company Block surged 9.93 per cent ahead of tonight’s trading update.
EML Payments rallied 7.21 per cent, Megaport 4.94 per cent and Life360 6.54 per cent.
Other growth stocks to shine included Imugene +10.87 per cent, PointsBet +7.72 per cent and Telix Pharmaceuticals +6.74 per cent.
Heavyweight movers included Telstra +1.27 per cent, toll road operator Transurban +0.61 per cent and property group Goodman +0.56 per cent. The high-street banks put on between 0.26 and 0.96 per cent.
Centuria Industrial REIT bounced 2.61 per cent as an 11 per cent increase in net tangible assets helped soften news of a 39.9 per cent slide in full-year net profit. The trust expects to pay a smaller distribution this fiscal year of 16 cents per unit, down from 17.3 cents in FY22.
An earnings upgrade boosted NRW Holdings 11.46 per cent. The mining contractor said it expected full-year earnings to be $157 million, ahead of previous guidance of $150-$155 million. The firm was sitting on record orders of $5.2 billion.
Fund manager Magellan shrugged off another month of net outflows, rising 3.08 per cent. Funds under management declined $2.5 billion in July.
Going down
Energy stocks retreated with Brent’s six-month low. Woodside gave up 2.54 per cent. Santos dropped 1.55 per cent. Beach Energy shed 1.67 per cent.
Bulk metal miners eased as Chinese iron ore prices fell 3.9 per cent this morning. Rio Tinto slid 1.62 per cent, Fortescue Metals 0.94 per cent and BHP 1.04 per cent.
Newcrest eased 1.41 per cent after water intrusion into a ventilation vent halted underground mining at the Cadia gold mine near Orange. The miner said surface activities remained operational and the interruption was not expected to impact full-year production.
Explosives group Orica fell 9.83 per cent to $15.51 after raising $650 million from institutional investors at $16 to help fund the acquisition of Axis Mining Technology.
A broker downgrade drove bottlo and hotel group Endeavour down 3.23 per cent. UBS reduced its rating from ‘Neutral’ to ‘Sell’, citing rises in operating costs and gaming taxes.
Other markets
Asian markets continued to regain losses earlier in the week triggered by tensions over Taiwan. The Asia Dow put on 0.91 per cent. China’s Shanghai Composite gained 0.68 per cent, Hong Kong’s Hang Seng 1.99 per cent and Japan’s Nikkei 0.57 per cent.
US futures eased after last night’s sharp move higher. S&P 500 futures dipped four points or 0.1 per cent.
Oil recouped a portion of last night’s loss. Brent crude climbed 42 US cents or 0.4 per cent to US$97.20 a barrel.
Gold also rebounded, rising US$7.50 or 0.4 per cent to US$1,783.90 an ounce.
The dollar firmed 0.21 per cent to 69.51 US cents.
