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A volatile session saw the ASX spiral to a five-week low before a partial rebound as gains in travel companies and a recovery in miners offset declines in tech companies and banks.

The S&P/ASX 200 swung wildly before reaching mid-session three points or less than 0.1 per cent lower. Along the way, the index put on as much as 43 points and lost as much as 66 points.  

Today’s action continued a pattern of early gains giving way to selling. The market has finished well short of its intraday peak each day this week. The index burst out of the blocks with an opening rise of almost 43 points this morning, collapsed then rebounded.

What’s driving the market

Travel and tourism stocks were the morning’s standouts after the federal government unveiled a $1.2 billion package to boost the ailing industry. The scheme includes a 50 per cent discount on air tickets to 13 destinations that depend heavily on international tourism.

Travel agents Flight Centre and Webjet led the charge, surging 9 and 3.8 per cent, respectively. Qantas added 1.6 per cent and Sydney Airport 2.2 per cent.

The tech sector resumed a month-long decline after a rebound in the Nasdaq Composite ran out of gas overnight. The tech-heavy US benchmark finished 0.04 per cent lower after being up as much as 1.6 per cent.

The big three iron ore producers were mixed following a sharp drop in ore prices after China introduced temporary pollution controls. The banks started the session well, but soon added to the down-pressures.

The local market ignored positive leads from the US. The Dow hit record levels for a third straight session, climbing 1.46 per cent overnight. The S&P 500 added 0.6 per cent.

“While rates are only down a touch, it’s the fact that they have stopped charging ferociously higher, which seems to have been enough to calm frayed nerves, helped along with the US Congress passing the stimulus bill designed to alleviate poverty in the US,” Axi Chief Global Market Strategist Stephen Innes said. “The past two weeks have been extremely volatile.”

Going up

Gold miners rose for a second day after the yellow metal recorded back-to-back gains for the first time in more than two weeks. Regis Resources tacked on 2.5 per cent, Evolution Mining 2.3 per cent and Newcrest 1.3 per cent.

Poke-maker Aristocrat Leisure has been on a tear, rising more than 10 per cent in two weeks as vaccination programs help reopen the global economy. Shares in the company climbed 1.9 per cent.

Bond surrogates attracted selective buying as yields in both Australia and the US declined. The Australian ten-year yield was lately down two basis points to 1.699 per cent. Transurban put on 1.8 per cent, Brambles 1.3 per cent, Wesfarmers 0.3 per cent and CSL 0.1 per cent.

Going down

The materials sector faded to its weakest level in more than a month after analysts at HSBC and Liberum downplayed talk of a “commodities supercycle”. BHP sank 1.7 per cent. Rio Tinto rebounded to a gain of 0.5 per cent and Fortescue Metals 0.3 per cent.

Rising yields have been a tailwind for lenders, lifting the big four high-street banks to 52-week highs. With yields now in retreat, ANZ fell 1.1 per cent, NAB 0.6 per cent, CBA 0.6 per cent and Westpac 0.6 per cent.

Yesterday’s relief rally in the battered tech sector proved fleeting. Afterpay slumped 5.5 per cent, Nearmap 2.4 per cent and NextDC 2.4 per cent. Z1P Co dived 2 per cent.

Other markets

A tepid morning on Asian markets saw the Asia Dow inch up 0.06 per cent. China’s Shanghai Composite put on 0.44 per cent, Hong Kong’s Hang Seng 0.18 per cent and Japan’s Nikkei 0.21 per cent.

US futures inched higher. S&P 500 futures added four points or 0.1 per cent.

Oil added to last night’s 0.6 per cent gain. Brent crude climbed 32 cents or 0.5 per cent to $US68.22 a barrel. Gold rose $3 or 0.2 per cent to $US1,724.70 an ounce.

The dollar eased 0.03 per cent to 77.28 US cents.

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