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The share market extended its longest winning run of 2022 as supply worries continued to boost commodity prices.

The S&P/ASX 200 rallied 42 points or 0.6 per cent by mid-session. The advance put the benchmark firmly on track for a fifth straight gain.

Energy producers and miners led as constraints on Russian and Ukrainian supply fuelled strong gains on commodity markets. Defensive havens such as gold and supermarkets declined.

What’s driving the market

The global ostracisation of Russia in the wake of the invasion of Ukraine has helped Australia glide through the worst of the global market turmoil. The ASX is on its first five-session tear since the Christmas Santa Rally, fuelled by strong gains in miners and oil producers.

This morning’s highlights included a post-pandemic high for Woodside Petroleum after US crude settled at a decade-high. BHP cracked $50 a share for the first time since August. Whitehaven Coal rose to a near three-year peak. Agribusiness GrainCorp entered record territory as wheat prices surged.

So-called commodity currencies such as the Australian and Canadian dollars have also been major winners. The Aussie cracked 73 US cents overnight, supported by expectations the economy will gain a lift from surging commodity prices.

“The Russia Ukraine war rages on, further roiling commodity prices with record moves in coal, oil, gas, wheat and aluminium. The risk positive and uber hot commodity backdrop sees commodity linked currencies outperform,” NAB currency strategist Rodrigo Catril said.

The Aussie was lately off its overnight peak at 72.89 US cents, down 0.06 per cent.

While sanctions against Russia have so far excluded energy, there are signs supply and financing issues are effectively shutting Russian exports out of the market. Bloomberg reported that attempts this week to sell Russian crude at a substantial discount failed to attract buyers.

City Index senior market analyst Matt Simpson said the trend in oil was “now in a parabolic stage – which rarely end well and usually complete with what is known as a ‘blow-off top’. But there is no way of knowing if we are close to any sort of top with the geopolotical landscape. And trying to nail a market top with such strong bullish momentum is akin to trying to catch a falling knife.”

Wall Street rebounded overnight after investors were reassured that the Ukraine war will not deflect the Federal Reserve from raising rates this year. Fed Chair Jerome Powell indicated the central bank was committed to lifting its target range by 25 basis points in two weeks’ time.

The S&P 500 rallied 1.86 per cent, reversing Tuesday’s loss. The Dow and Nasdaq also advanced.

Going up

GrainCorp climbed 2.34 per cent to a record amid increased demand from Asia as the war in Ukraine potentially removes up to 30 per cent of global wheat supply. Rural supplier Elders firmed 2.04 per cent.

Woodside Petroleum jumped 3.78 per cent to a level last seen in the first month of the pandemic sell-off. Santos gained 3.31 per cent. Beach Energy put on 4.36 per cent.

BHP rose as high as $50.09 before trimming its gain to 3.33 per cent at $49.93. This morning’s peak was the highest since last year’s collapse in iron ore prices. Rio Tinto also scored a seven-month high, rising 3.31 per cent. Fortescue Metals firmed 3.23 per cent.

Whitehaven Coal neared $4 for the first time since May 2019. The miner was last up 8.24 per cent at $3.87 after hitting $3.95.

Lithium miner Lodestar Minerals firmed 25 per cent on the launch of a soil sampling program to test a promising anomaly at the Coolgardie West project. Managing Director Bill Clayton said the target was “one of the more compelling lithium soil anomalies I have seen”.

Junior explorer Viking Mines briefly jumped more than 50 per cent after the first results from its Jana’s Reward target at the First Hit project in WA intersected “bonanza grades”. CEO and Managing Director Julian Woodcock said the results were “extremely encouraging”. The share price later trimmed its gain to 9.09 per cent.

Going down

The dividend payments season is well underway. Supermarkets Coles and Woolworths were among the major drags as they traded without their dividends. Coles shed 3.18 per cent. Woolies dipped 2.28 per cent.

Also trading ex-dividend were InvoCare -3.19 per cent, ASX Ltd -3.17 per cent and Nine Entertainment -1.44 per cent.

Theme park operator Ardent Leisure eased 1.12 per cent after acquiring three family entertainment centres in Colorado for US$26 million.

Perfume retailer Dusk dropped 1.88 per cent after scrapping plans to acquire candle component supplier Eroma. Dusk said preconditions for the acquisition had not been satisfied.

Other markets

Asian markets followed European and US markets higher. The Asia Dow tacked on 0.88 per cent, China’s Shanghai Composite 0.34 per cent, Hong Kong’s Hang Seng 0.4 per cent and Japan’s Nikkei 0.84 per cent.

US futures drifted lower. S&P 500 futures fell 6.5 points or 0.15 per cent.

Oil continued its bull run. Brent crude charged up another US$3.83 or 3.4 per cent to US$116.76 a barrel.

Gold recovered some of its overnight losses, rising US$7.90 or 0.4 per cent to US$1930.20, an ounce.

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