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A volatile run of volte-faces for Australian shares continued as the curtain descended on the most tumultuous financial year since the Great Financial Crisis.

The S&P/ASX 200 rallied 76 points or 1.3 per cent this morning, erasing most of yesterday’s loss and extending a pattern of sharp daily reversals. The benchmark index has moved more than 100 points during three of the last four sessions and 96 points on the fourth.

The financial year ends at midnight with passive index-followers facing heavy losses. A year that began with the index at 6619 looks set to end around 700 points or more than 10 per cent lower. The index built steadily from July 1 to a peak at 7197 in February before a five-week pandemic panic sell-off sent it plunging to a seven-year low at 4403 in March. A three-month recovery has helped the index claw back more than half of those losses.

The rebound has stuttered over the last three weeks as the rise of coronavirus cases in the US and Victoria dented confidence that the worst of the pandemic had passed. Volatility increased as bulls buying market dips battled bears betting the steady drip of negative headlines will fuel a second stock market collapse. A survey released this morning showed consumer confidence dived 4.6 per cent last week, the biggest fall since March.

This morning the market was more concerned with overnight events in the US, where upbeat housing data helped the market shrug off record numbers of COVID-19 infections. The S&P 500 rallied 1.47 per cent. The Dow bounced 580 points or 2.32 per cent.

Four of eleven local sectors rose more than 2 per cent this morning, led by a 3.5 per cent bounce in energy stocks. The industrials sector gained 2.1 per cent, consumer discretionary 2.2 per cent and consumer staples 2.3 per cent.

Fast-food franchisor Collins Foods completed its recovery from the March pandemic lows by bouncing 14.1 per cent as sales growth at the company’s KFC outlets in Australia offset declines in Europe. Underlying full-year net profit after tax increased 5.1 per cent to $47.3 million.

Traders betting on recovery plays have developed whiplash over the last week. Qantas bounced 7.2 per cent after completing a $1.4 billion capital raising. Seven West Media rose 6.8 per cent, Domain Holdings 5.7 per cent, Corporate Travel Management 4.7 per cent and childcare centre operator G8 Education 2.9 per cent.

At the big end of the index, Woodside put on 4.1 per cent, Woolworths 2.7 per cent, Wesfarmers 2.1 per cent and Macquarie Bank 1.6 per cent. The big four banks gained between 1.1 and 1.6 per cent.  BHP added 0.8 per cent and Rio Tinto 0.1 per cent. Health giant CSL slipped 1 per cent as traders rotated out of defensive stocks into riskier assets.

The Shanghai Composite advanced 0.4 per cent after China’s parliament passed¬† new security laws for Hong Kong. Hong Kong’s Hang Seng gained 0.8 per cent and Japan’s Nikkei 1.8 per cent. S&P 500 index futures rallied seven points or 0.2 per cent.

Oil trimmed overnight gains. Brent crude eased 24 cents or 0.6 per cent to $US41.47 a barrel. Gold gained $1.80 or 0.1 per cent at $US1,783 an ounce.

The dollar edged up 0.17 per cent to 68.76 US cents.

What’s hot today and what’s not:

Hot today: Shares in thinly-traded tech minnow Etherstack (ASX:ESK) exploded into life this morning after the wireless technology company announced a deal with South Korean multinational Samsung. The deal will see Etherstack’s land mobile radio switching technologies embedded in Samsung’s network solutions. Speculators seized on the commercial possibilities of a deal with a conglomerate that accounts for almost a fifth of all South Korean exports. The previously somnolent stock price shot from 12 cents to a peak of 83 cents on huge volume before easing to 73 cents, a return for the day of 508.3 per cent.

Not today: Just 12 companies on the S&P/ASX 200 lost ground. WiseTech Global (ASX: WTC) was the worst, falling 2.5 per cent on news CEO Richard White had sold almost 2.5 million shares. The sale is a drop in the ocean for White, who retains 151 million shares in the company he founded, representing roughly 46.9 per cent of all the shares on issue. White reaffirmed his intention to remain a long-term shareholder.

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