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The share market pushed towards a fourth straight advance as improved commodity prices helped offset mixed leads from Wall Street.

The S&P/ASX 200 rallied 45 points or 0.66 per cent by mid-session.

Gains in resource and retail stocks helped lift the Australian benchmark to a six-week high. Bank stocks dragged following a disappointing trading update from ANZ.

What’s driving the market

The new mood of optimism this week on the ASX survived a generally negative night on Wall Street, thanks in part to gains in metals and oil. Copper, aluminium and gold rallied overnight after Chinese intervention helped push the US dollar to a three-week low.

A weaker greenback makes dollar-denominated commodities cheaper for buyers using other currencies. Chinese state-backed banks sold the dollar yesterday after the yuan slumped to a 15-year low. The Australian dollar climbed more than 1.5 per cent overnight to 64.89 US cents, a three-week high.

The ASX sustained its winning run amid signs central banks are starting to slow this year’s series of aggressive rate hikes. Overnight, the Bank of Canada surprised the market by raising its benchmark rate a smaller-than-expected 50 basis points.

CMC’s chief market analyst, Michael Hewson said the move “suggests that central banks are starting to wake up to the possibility that too aggressive rate rises could do more harm than good.

“It’s also got markets asking the question, could the Fed follow suit next week after another poor set of housing numbers from the US,” he added.

The prospect of a Fed “pivot” helped the Dow eke out a fourth straight rise, albeit a slender 0.01 per cent. The S&P 500 and Nasdaq declined 0.74 and 2.04 per cent, respectively, following weak trading updates from Microsoft and Alphabet (Google).

Going up

Resource stocks led the rally following strong gains in metals. Gold miners Sandfire and St Barbara both rallied 7 14 per cent.

Newcrest popped 3.05 per cent to a two-month high on the prospect of improved gold and copper production this quarter following planned maintenance shutdowns. Gold production declined 17 per cent last quarter. The miner said it remained on track to meet full-year guidance as production recovers.

Lynas Rare Earths climbed 8.35 per cent as news of progress on projects in Australia and the US helped offset operational challenges in Malaysia due to a water supply failure. Production and sales both declined last quarter.

A record first quarter for iron ore shipments lifted Fortescue Metals 0.22 per cent. Shipments increased 4 per cent over the prior corresponding period. Share price gains were kept in check by news of a 16 per cent increase in costs. The miner maintained its full-year shipping, costs and capital expenditure guidance.

Other miners to post gains included South32 +4.95 per cent, Nickel Industries +4.58 per cent and Pilbara Minerals +4.82 per cent.

A post-pandemic rebound in sales boosted JB Hi-Fi 1.38 per cent. The retailer’s Australian sales increased 14.6 per cent last quarter from Q1 FY22. New Zealand sales surged 27.7 per cent.

Automotive and outdoor sports group Super Retail also reported strong sales growth. The retailer’s shares rallied 2.88 per cent on news group sales expanded 20 per cent over the first 16 weeks of this fiscal year from the same period in FY22.

Shopping mall owner Unibail-Rodamco-Westfield gained 0.14 per cent after raising its full-year guidance as tenant sales improved. Qube was unchanged after reaffirming full-year guidance.

Going down

ANZ slumped 4.02 per cent as a 5 per cent increase in full-year cash profit was overshadowed by a cautious outlook from CEO Shayne Elliott.

“Cost-of-living pressures are starting to have a meaningful impact and the next six months will be testing,” Elliott said.

“This is particularly an issue for first-time homeowners who are only starting to build up their equity as well as those with less stable employment. This is why we have kept in place the additional hardship resources we invested in during the pandemic in Australia.”

The bank reported a cash profit of $6.515 billion. Shareholders will receive a final dividend of 74 cents per share.

Bank of Queensland shed 4.48 per cent as its shares traded without the right to the latest dividend. Westpac fell 0.94 per cent. NAB gave up 0.41 per cent. CBA swung to a gain of 0.41 per cent.  

Core Lithium dropped 2.06 per cent after an offtake agreement with Tesla fell through. The firm said a deadline for concluding a term sheet passed without the two sides reaching agreement.

Australian Clinical Labs sank 6.21 per cent after outing itself as the latest victim of a cyber security attack. The firm said Medlab Pathology, acquired late last year, had experienced a “notifiable cyber incident involving personal information of some of Medlab’s patients and staff”.

Drilling services provider AJ Lucas plunged 47.83 per cent after the UK’s new Prime Minister announced he would reimpose a ban on shale gas fracking. Rishi Sunak said he would restore a moratorium briefly lifted by his predecessor, Liz Truss.

A post-lockdown dip in sales knocked online beauty products retailer Adore down 3.95 per cent. The firm reported $45.4 million in Q1 revenue, a drop of 29 per cent from the same period last year.

Other markets

A rebound in Hong Kong and Chinese mainland stocks accelerated after a recovery in the yuan. The Hang Seng index gained 2.58 per cent. The Shanghai Composite lifted 0.23 per cent. The Asia Dow added 1.19 per cent. Japan’s Nikkei eased 0.18 per cent.

US futures shrugged off an 18 per cent after-market plunge in Facebook owner Meta Platforms following a poorly-received trading update. S&P 500 futures rose 18 points or 0.46 per cent.

Oil added to last night’s 2.3 per cent rally. Brent crude climbed 53 US cents or 0.55 per cent to US$96.22 a barrel.

Gold rose to a new three-week high. The yellow metal advanced US$2.90 or almost 0.2 per cent to US$1,672.10 an ounce.

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