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Tech and commodity stocks steered the share market towards its first gain of the week following Wall Street’s best session since 2020.

The S&P/ASX 200 overcame an early wobble to advance 44 points or 0.6 per cent by mid-session.

The benchmark briefly threatened to turn negative as a poorly-received trading update from NAB weighed on the financial sector. Fortescue Metals, Woodside Petroleum and Afterpay owner Block helped steady the ship.

What’s driving the market

The ASX started to move beyond this week’s rate rise sell-down after a relief rally swept Wall Street overnight. The S&P 500 soared 2.99 per cent after the Federal Reserve raised its benchmark rate while soothing fears a mega-raise of 75 basis points might be in the offing.

“The highlight of the press conference as far as market reaction was concerned… was [Chair Jerome] Powell’s comments that 75bps isn’t something the FOMC is actively considering and that 50bps is on the table for the next couple of meetings,” NAB’s Head of FX Strategy Ray Attrill said.

The news triggered sharp moves on equity, bond and currency markets as traders that had factored in the worst-case scenario breathed a sigh of relief. The Nasdaq Composite jumped 3.19 per cent. US treasury yields reversed off three-and-a-half-year highs. The greenback plunged.

The Australian dollar was the best-performing major currency over the last 24 hours, flying up more than 2 per cent. The Aussie was lately trading at 72.53 US cents, up from near 71 cents overnight.

“The US dollar index fell around -1% during its second worst session this year, and the Australian dollar enjoyed its best day since the pandemic,” City Index senior market analyst Matt Simpson said.

Australian bond yields also retreated, falling 16 basis points to 3.387 per cent. Bank stocks, which welcome higher rates for their margin opportunities, declined. The heavily-weighted financial sector was this morning’s only loser, falling 0.4 per cent.

Going up

Growth stocks rallied with the retreat in long-term borrowing costs. Imugene advanced 11.76 per cent, Telix Pharmaceuticals 4.93 per cent and Appen 4.67 per cent. Block added 1.4 per cent.

Lithium miners pared recent weakness. Liontown Resources put on 5.88 per cent, Pilbara Minerals 6.46 per cent and Allkem 5 per cent. Other miners to advance included Chalice +6.9 per cent and Regis Resources +5.37 per cent.

At the heavyweight end, Fortescue Metals added 3.23 per cent, Newcrest 2.21 per cent and Woodside Petroleum 1.45 per cent.

A 19 per cent increase in gross written premiums across the first half lifted QBE 3.58 per cent. The insurer told today’s AGM it would review its full-year outlook at the half-year result.

Investment manager Challenger climbed 3.22 per cent to a two-year high after an upbeat presentation at the Macquarie Australia Conference. Managing Director and CEO Nick Hamilton said the industry was experiencing tailwinds and the firm was well positioned for future growth.

AMP rallied 1.68 per cent despite news clients continued to pull funds last quarter. The financial manager’s wealth management division saw net cash outflows of $1.3 billion. Assets under management declined to $136.5 billion from $142.3 billion the previous quarter.

Vicinity Centres gained 3.13 per cent after reaffirming full-year guidance.

At the speculative end, Red Sky Energy jumped 70 per cent after an independent expert issued an upbeat assessment of oil in place at the explorer’s Killanoola project.

Going down

NAB dropped 1 per cent as increased expenses and margin pressure took some of the shine off strong half-year growth and a dividend increase. Expenses rose 2.6 per cent. Net interest margin contracted 11 basis points to 1.63 per cent.

Cash earnings improved 4.1 per cent to $3.48 billion from 1H21. Shareholders will receive an interim dividend of 73 cents per share, up from 60 cents last year.

Qantas eased 0.26 per cent after striking a deal to buy Alliance Aviation for $614 million. Qantas already owns 20 per cent of the charter jet firm and will pay a 32 per cent premium to mop up the rest of the shares. Alliance Aviation shares jumped 22.22 per cent.

Asset manager Janus Henderson plunged 14.56 per cent to a 13-month low after missing analyst estimates on first-quarter earnings and revenue. Assets under management declined by 8 per cent, excluding the sale of a subsidiary.  

Beauty and wellness business BWX slumped 19.3 per cent after full-year guidance fell short of market expectations. The company expects earnings to contract in the second half, dashing expectations for strong growth. Management blamed increased costs, supply-chain issues and acquisitions not yet meeting expectations.

Private hospital operator Ramsay Health Care fell 0.63 per cent after falling out with health insurer Bupa. Ramsay said it had issued notice to terminate an agreement between the parties after they were unable to reach terms on a new contract.

Other markets

China’s Shanghai Composite resumed trade after a three-day holiday with a rise of 0.55 per cent. Hong Kong’s Hang Seng put on 0.63 per cent. The Asia Dow gained 0.88 per cent. Trade in Japan was suspended for a public holiday.

US futures eased in the wake of last night’s burst. S&P 500 futures were recently down seven points or 0.17 per cent.

Gold took off as the US dollar slumped. The yellow metal soared US$32.50 or 1.7 per cent to US$1,901.30 an ounce.

Oil added to last night’s near 5 per cent advance. Brent crude climbed 16 US cents or 0.15 per cent to US$110.28 a barrel.

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