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A snap lockdown in Brisbane and a dive in US futures undermined the share market’s push for the longest winning run of the year.

The S&P/ASX 200 rallied as much as 36 points in early action before fading to a mid-session loss of 16 points or 0.27 per cent.

Miners, industrials and oil companies cushioned the market from a deeper decline after the index touched its strongest level since March 2. A recovery and positive finish this afternoon would hand the benchmark its first four-session win streak of the year.

What’s driving the market

The mood on equity markets improved last week as the cost of borrowing fell from multi-month highs. The S&P 500 and Dow recorded all-time closing highs on Friday, bolstering hopes investors had put lingering concerns about rising yields behind them.  The S&P 500 gained 1.66 per cent and the Dow 1.39 per cent.

“There was quite a bit of optimism in the air on Friday as we career towards the end of the month and the end of the quarter this week,” NAB Senior Economist and Director David de Garis wrote. “What the [US] market is most interested in is the big boost that will arrive in March and ensuing months from the $1,400 cheques, and other stimulus payments, further economy re-opening and the vaccine roll-out,” he added.

The early push floundered as US futures retreated. S&P 500 futures fell 23 points or 0.6 per cent. Nasdaq futures slid 0.8 per cent.

The local market faced additional headwinds from the end of the JobKeeper program and news greater Brisbane will re-enter lockdown for three days from 5 pm this afternoon. The latest restrictions follow ten new cases of Covid-19 in Queensland, including four from community transmission.

“This will… enable our health authorities to get on top of the contact tracing,” Queensland Premier Annastacia Palaszczuk said. “This is a huge job now that we have to do because we’ve got more of this community transmission.”

Schools in greater Brisbane will close from tomorrow. People in greater Brisbane will only be able to leave home for essential reasons.  

Going up

The big three iron ore producers filled three of the four top slots in the ASX 20 index of market heavyweights following rallies in metals and iron ore. Miners and raw materials bounced on Friday amid optimism over US infrastructure spending plans. President Joe Biden is expected to release details this week. BHP climbed 1.2 per cent, Fortescue Metals 0.7 per cent and Rio Tinto 0.6 per cent. Transurban led with a rise of 1.7 per cent.

Miners also filed several of the top slots on the broader ASX 200. Iluka Resources added 6.7 per cent and South32 2.7 per cent. Metals recycler Sims gained 3 per cent and Centuria REIT 2.8 per cent.

Energy companies rose as the latest failure to refloat the Ever Given kept oil well bid ahead of an OPEC+ meeting this week. Brent crude jumped 4.2 per cent on Friday amid speculation it may take weeks to clear the blockage in the Suez Canal. Woodside gained 0.5 per cent, Santos 1.9 per cent and Oil Search 1.4 per cent.

The banks were mixed. NAB gained 0.2 per cent, Westpac 0.1 per cent and ANZ less than 0.1 per cent. CBA fell 0.4 per cent.  

Mortgage Choice surged 62.6 per cent after real estate listings business REA Group pitched a $244 million takeover offer. The offer has the unanimous support of the Mortgage Choice board. Shares in REA slipped 1.5 per cent.

Going down

The market lost altitude as tech stocks retreated and the latest lockdown weighed on consumer stocks. A jump in bond yields weighed on alternative investments. In the tech space, Megaport fell 3.8 per cent, Xero 3.9 per cent and Afterpay 2.6 per cent.

Wesfarmers shed 1.1 per cent, JB Hi-Fi 3.1 per cent and Premier Investments 1 per cent. Travel agents Flight Centre and Webjet dropped 2.5 and 1.9 per cent, respectively.

Tabcorp eased 2.1 per cent after rejecting a $3 billion bid for its Wagering & Media business. The wagering group said instead it would undertake a strategic review of assets to maximise their value to shareholders.

AMP fell 2.6 per cent after a 30-day exclusivity period passed without a deal with Area Management for AMP’s private markets business. AMP said it would continue to pursue a transaction.

The unexpected departure of CEO Jim Leighton for personal reasons helped pull poultry group Inghams down 3.8 per cent. Director Andrew Reeves will take over as CEO and Managing Director.

Dairy group Synlait slumped 4.6 per cent to a four-year low after reporting a 76 per cent dive in half year-net profit to $6.4 million. The result was affected by a slump in infant formula, shipping delays and exposure to A2 Milk Company’s loss of custom.

Confirmation of Chinese tariffs of 175.6 per cent helped pull Treasury Wine Estates down 1.6 per cent. China’s Ministry of Commerce issued a final determination imposing the tariff for five years following an investigation into alleged wine dumping.

Other markets

A mixed morning on Asian markets saw the Asia Dow ahead 0.02 per cent as China’s Shanghai Composite gained 0.33 per cent and Japan’s Nikkei added 0.76 per cent. Hong Kong’s Hang Seng shed 0.07 per cent.

Oil trimmed Friday’s bounce in choppy trade. Brent crude eased eight cents or 0.1 per cent to US$64.35 a barrel. Gold retreated $5.30 or 0.3 per cent to US$1,727 an ounce.

The dollar dropped 0.16 per cent to 76.24 US cents.

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