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The Australian share market has lost some of its morning shine but is still holding on to modest gains, buoyed by a strong health sector as commodity stocks struggle.

The S&P/ASX 200 sat 0.35 per cent higher at 7591.4 points by mid-session after rising above 7600 points in early action. A close around this level could mark a 2022 high as the ASX follows broadly positive cues from Wall Street overnight.

Hospital operator Ramsay Health Care is doing a lot of the heavy lifting for the healthcare sector following a takeover offer from private equity giant KKR & Co valuing Ramsay at over $20 billion.

However, market heavyweights Rio Tinto, BHP, and Woodside were all in the red.

What’s driving the market

A strong start to Wall Street quarterly earnings reports set the ASX up for a green open, though falling commodity prices kept the gains tepid.

The International Monetary Fund (IMF) overnight slashed its growth forecast for 2022 by 0.8 per cent to 3.6 per cent, blaming the Russia-Ukraine war and surging inflation in many parts of the world for the downgrade.

Oil prices were already ripe for profit-taking after a four-day rally, and after the IMF news, both Brent and West Texas Intermediate crude benchmarks tumbled more than 5 per cent overnight.

“Renewed lockdowns in China, surging [yields and] economic growth downgrade saw commodities prices coming under pressure,” ANZ Research analysts Brian Martin and Daniel Hynes said.

While Brent futures have risen over morning trade on Wednesday, the energy sector remains subdued.

Meanwhile, consumer discretionary stocks are following Wall Street’s guidance after some major US gaming companies each posted stellar gains overnight.

Gold has continued to retreat, down 0.53 per cent to US$1948 an ounce. Silver is down 0.91 per cent to $25.15 an ounce

Iron ore is down 0.67 per cent to US$154.58 a tonne. Lead rallied 0.34 per cent, nickel 1.72 per cent, and coal 3.85 per cent.

The Australian dollar is up 0.49 per cent to 74.12 US cents.

Going up

Ramsay Health Care skyrocketed almost 26 per cent to $80.98 by mid-session after confirming the $20.05 billion takeover offer from KKR.

KKR is offering $88 a share for full control of Ramsay, representing a premium of almost 37 per cent on Ramsay’s last closing price of $64.39.

Other big players in the health care sector have travelled in Ramsay’s slipstream, with biotech giant CSL up 1.43 per cent to $266 and hearing aid specialist Cochlear up 0.93 per cent to $226.54. Sonic Healthcare is up 1.86 per cent, ResMed is up 2.09 per cent, and Fisher & Paykel Healthcare is up 2.64 per cent.

Australia’s big four banks are each trading in the green, propped up by the prospect of a June interest rates hike after the Reserve Bank of Australia yesterday published the minutes from its April 5 policy meeting.

ANZ was up 0.79 per cent, Commonwealth Bank 0.34 per cent, NAB 0.24 per cent, and Westpac 0.2 per cent.

Macquarie Group rose for the third straight trading session, up 0.62 per cent to $207 a share.

On the junior end of the market, a major high-value rare earth discovery saw shares in exploration company Petratherm more than double by mid-session, up 154 per cent to 16 cents each.

Assays from 44 holes at Petratherm’s Comet project in South Australia’s Northern Gawler Craton returned 23 hits of over 1000 parts per million (ppm) total rare earth oxides.

Meanwhile, high purity alumina (HPA) specialist Altech Chemicals spiked 31.6 per cent to 10 cents following the release of a pre-feasibility study (PFS) for the development of a 10,000-tonne-per-annum silicon/graphite alumina coating plant in Germany.

Going down

Energy stocks and big miners were the biggest losers today, with weakened commodity prices seeing most big players retreat over morning trade.

In the heavyweight materials sector, Rio Tinto led the declines after flagging a poor quarterly performance from its iron ore division.

Rio’s output from its Pilbara operations fell roughly 8 per cent over the March quarter year-on-year, even as lower-grade products took up a larger share of shipping volumes. Rio shares were down 1.69 per cent by mid-session to $119.61.

BHP was down 0.68 per cent, and gold miner Newcrest was down 0.19 per cent.

As for the energy sector, Santos was trading 0.9 per cent lower at $8.24 after announcing a $338 million share buyback in May amid high oil prices.

Santos, which said it was being undervalued by the market, announced the buyback as part of a new capital management framework for the business.

Woodside was down 1.03 per cent at mid-session to $32.57 a share, and Washington H Soul Pattinson was down 0.97 per cent to $28.52.

Other markets

Asian markets were mostly green today, taking back some of yesterday’s lost ground.

Japan’s Nikkei 225 was up 0.57 per cent to 27,139 points, Hong Kong’s Hang Seng was up 0.43 per cent to 21,117, while the Asia Dow was up 0.85 per cent to 3473.

S&P 500 futures were down 19 points of 0.43 per cent.

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