The share market sealed its longest run of weekly advances since August as Commonwealth Bank hit a record and fellow index heavyweight CSL scaled a 15-month high.
The S&P/ASX 200 rallied 46.5 points or 0.62 per cent this afternoon to 7558. Today’s close was the highest since last April.
The advance boosted the index’s tally for the week to 64 points or 0.85 per cent. The benchmark finished within 1 per cent of its 2021 all-time high.
Property companies, healthcare providers and banks set the pace. Miners dragged after declines in iron ore and metals.
What moved the market
Big has been beautiful over the last two weeks as the ASX’s three largest companies by market weighting all hit 52-week highs. Commonwealth Bank today joined BHP in the “all-time high club”, hitting $111.43 before trimming its rise to 1.29 per cent at $111.15.
Leading biotech CSL charged up 3.03 per cent to its highest since November 2021. BHP set a record last week but eased this session as the price of iron ore fell for a third day.
The result of all this heavy lifting has been five weeks of gains for the ASX 200 since the turn of the year. The Australian benchmark has advanced almost 7.4 per cent in that time.
The rally faces its toughest test this year when the Reserve Bank meets next week to set the new cash rate target. With inflation running hot at the end of 2022, the debate is likely to settle on whether to raise by 25 or 50 basis points.
“The release of a hotter-than-expected Q4 CPI print has likely locked in a 25bp rate hike and skews the risks towards a larger increase,” Tony Sycamore, market analyst at IG, said.
“The most likely outcome on Tuesday is that the RBA acknowledges it discussed a 50bp rate hike but delivers a 25bp rate,” he added. “It will likely note that it ‘expects to increase interest rates further in the period ahead’ alluding to another 25bp rate hike in March which would take the cash rate to 3.60%.”
The market shrugged off a mixed overnight session on Wall Street and a plunge in US futures following poorly-received after-market trading updates from index heavyweights Apple, Amazon and Alphabet.
US investors were left to rue a 3.24 per cent overnight surge on the Nasdaq Composite after Q4 earnings from the big guns came up short. Apple and Google parent Alphabet both missed Wall Street estimates.
Apple shares dropped 3.24 per cent in extended trade this afternoon. Alphabet shed 4.6 per cent. Amazon reversed 5.07 per cent after beating on revenue, but missing on earnings.
Nasdaq futures slumped 1.48 per cent. S&P 500 futures dropped 0.5 per cent.
Winners’ circle
The big four banks provided much of the weight behind today’s move, rising between 1.27 and 2.34 per cent. Wesfarmers added 1.26 per cent, Coles 0.95 per cent and Santos 0.87 per cent.
Investment managers surged after Janus Henderson beat Wall Street estimates. The dual-listed asset manager’s Australian shares soared 12.85 per cent, broadly mirroring a 13.37 per cent rally in its US shares after it reported stronger quarterly earnings than the market expected. The firm reported adjusted fourth-quarter earnings per share of 61 US cents, compared to the analyst estimate of 41 cents EPS.
Pinnacle Investment Management reversed two days of weakness with a bounce of 9.58 per cent. Perpetual added 3.93 per cent. Magellan firmed 1.43 per cent.
Property stocks enjoyed another day in the sun as investors bet interest rate pressures will subside later this year. HMC Capital firmed 4.89 per cent, Centuria Capital 4.39 per cent and Mirvac 4.27 per cent.
Coal miners rebounded after trading at their lowest in several weeks following a collapse in exports out of Newcastle. The Australian Financial Review this morning reported volumes through the port were roughly a third lower last month than the same period last year.
New Hope bounced 0.7 per cent off a two-month low. Whitehaven traded at its weakest since mid-November before reversing 0.61 per cent.
Doghouse
IAG shed 2.07 per cent after warning floods in New Zealand and increased costs for natural perils will dent margins. The insurer revised its full-year insurance margin forecast down to 10 per cent from previous guidance of 14-16 per cent.
Gold miners retreated after the yellow metal failed to hold onto a nine-month intraday high. Gold for April delivery peaked at US$1,975.20 before settling US$12 or 0.6 per cent lower for the session at US$1,930.80 an ounce.
Ramelius reversed 7.58 per cent, Regis 6.76 per cent and Gold Road Resources 5.95 per cent.
Bulk metal miners fell as iron ore prices extended this week’s retreat. Dalian ore prices dropped another 1.1 per cent this afternoon, following yesterday’s 3.3 per cent decline.
BHP gave up 1.92 per cent, Rio Tinto 1.99 per cent and Fortescue Metals 1.3 per cent.
Bega Cheese slid 3.96 per cent after announcing the immediate departure of CEO Paul van Heerwaarden. Former CFO and COO Pete Findlay will take over in a move flagged back in October.
Other markets
A mixed session on Asian markets saw Japan’s Nikkei index firm 0.37 per cent. The Asia Dow shed 0.12 per cent, China’s Shanghai Composite 1.37 per cent and Hong Kong’s Hang Seng 1.82 per cent
Oil fell for a sixth day. Brent crude declined 15 US cents or 0.2 per cent to US$82.02 a barrel.
Gold dropped US$1.10 or 0.06 per cent to US$1,929.70 an ounce.
The dollar eased 0.17 per cent to 70.61 US cents.