A sharp rebound on Asian markets helped the ASX overcome early losses after China announced a press conference to address Covid restrictions.
The heavily-weighted mining sector helped the S&P/ASX 200 swing from an opening loss of 28 points to a closing gain of 24 points or 0.33 per cent.
Commodity stocks tracked recoveries in the prices of iron ore, crude oil, copper and gold. Two-thirds of sectors declined, underlining the narrowness of the rally.
What moved the market
The ASX joined a regional recovery when news wires reported Chinese health officials would hold a press conference at 3 pm Beijing time (6 pm AEDT) on Covid controls. Stocks surged on hopes authorities will relax restrictions after a weekend of angry protests on China’s streets.
The announcement followed the biggest outbreak of anti-government protests in China since 1989. China deployed a heavy police presence yesterday evening to ensure there was no repeat of the weekend’s protests.
Asian markets rallied sharply this afternoon. Hong Kong’s Hang Seng bounced 3.68 per cent. The Shanghai Composite put on 2.21 per cent. The Asia Dow swung to a gain of 0.8 per cent. Japan’s currency-sensitive Nikkei was an outlier, falling 0.61 per cent.
Commodity markets also responded. BHP and other bulk metal producers rallied as iron ore climbed 2.8 per cent on the Dalian Commodity Exchange and copper rose almost 1.6 per cent in US trade.
Oil advanced after the European Union failed to agree on a price cap for Russian crude. The latest talks stalled on Poland’s insistence on a low price to undermine Russia’s ability to fund its war in Ukraine. Brent crude surged US$1.92 or 2.3 per cent to US$85.81 a barrel.
The dollar bounced 0.84 per cent to 67.07 US cents, reversing much of last night’s slump.
The market opened underwater following solid falls in the US overnight. The S&P 500 shed 1.54 per cent as China growth concerns were compounded by hawkish commentary from Federal Reserve officials.
Back home, consumer confidence continued to improve last week, albeit from depressed levels. The ANZ-Roy Morgan confidence index climbed 1.8 per cent to its highest since early October.
Winners’ circle
Bulk metal producers led the turnaround when news of the China press conference broke. Fortescue Metals jumped more than 4 per cent before paring its advance to 2.21 per cent. Rio Tinto gained 3.53 per cent. BHP added 2.12 per cent.
Other mining gains included Champion Iron +3.5 per cent, South32 +3.04 per cent and Liontown Resources +2.97 per cent.
Santos overcame early pressure to advance 1.1 per cent after reporting a gas leak in a pipeline off the coast of WA. The John Brookes platform and a pipeline running to the Varanus Island gas processing facilities were shut down and depressurised after a “small” leak was discovered in a subsea flange.
The initial decline reversed following news the producer has renewed a gas supply agreement with Brickworks for another 11 years from 2025. Brickworks shares eased 0.22 per cent.
Kiwi medical device manufacturer Fisher & Paykel Healthcare surged 9.84 per cent after beating first-half revenue guidance. Operating revenue of $690.6 million was ahead of August guidance of $670 million and up 21 per cent on pre-pandemic performance.
A positive session for healthcare stocks saw sector heavyweight CSL gain 0.75 per cent. Ramsay Health Care firmed 0.88 per cent after forecasting a gradual recovery as Covid headwinds abate.
Microba Life Sciences soared 52.27 per cent after medical diagnostics heavyweight Sonic Healthcare invested $17.8 million for a 19.99 per cent stake in the microbiome diagnostics specialist. The alliance will help Microba expand into Australia, New Zealand, Europe and the US. Sonic’s shares finished flat.
Bank gains included ANZ +0.77 per cent, NAB +0.32 per cent and Westpac +0.29 per cent. CBA dipped 0.36 per cent.
Doghouse
Woodside Energy eased 0.35 per cent after production guidance missed expectations. The company expects to produce 180-190 million barrels of oil equivalent in its first full year of production since acquiring BHP’s petroleum assets. Analysts expected more following quarterly production of 51.2 MMboe.
Fast-food operator Collins Foods slumped 19.82 per cent after reporting a sharp decline in half-year profit. Statutory net profit contracted to $11 million from $26.4 million last year. Underlying profit declined 14.2 per cent to $24.8 million as the company battled inflationary headwinds and margin pressure.
Plus-size clothes retailer City Chic Collective fell for a third day since Monday’s disastrous trading update. An 8.78 per cent decline this afternoon extended the retailer’s loss since Monday beyond 50 per cent.
GrainCorp slid 4.89 per cent as its shares traded without the right to the latest dividend.
Other markets
US futures rebounded after last night’s tumble. S&P 500 futures climbed 13 points or 0.32 per cent.
Gold clawed back US$12 or 0.7 per cent of last night’s loss, rising to US$1,752.30 an ounce.