The share market pushed towards a fifth straight weekly advance as gains in banks and a 52-week high in CSL helped offset mining losses.
The S&P/ASX 200 rallied 23 points or 0.31 per cent by mid-session.
The advance boosted the index’s tally for the week to 44 points or 0.6 per cent. A positive close this afternoon would seal the longest weekly win streak since August.
Leading biotech CSL climbed 2.54 per cent to its highest since November 2021. Property companies, tech stocks and banks also advanced. Miners wilted following declines in iron ore and metals.
What’s driving the market
The ASX 200 moved back to within 1.2 per cent of its 2021 peak as investors exhibited few nerves ahead of next week’s Reserve Bank rates decision. This year’s strong advance has been driven by the index’s three largest companies.
BHP, CBA and CSL have all hit 52-week highs in the last week. In the case of CBA and BHP, their peaks were all-time highs. CBA rose 0.84 per cent this morning, back towards Wednesday’s record.
Markets have grown increasingly comfortable with the interest rate outlook, betting that tops or “terminal rates” are near both here and in the US. The Reserve Bank meets next week for the first policy meeting of 2023. Most economists expect the bank to raise the cash rate target to 3.35 per cent.
“It is expected that the RBA would not want to lose its grip over inflation fight, and the cash rate is likely to be raised by another 25 bps,” Kunal Sawhney, CEO of research group Kalkine, said. “There are compelling factors like the December quarter inflation coming high and the labour market going strong in the country.
“You don’t want to lose momentum if inflation is falling bit by bit, which is why a little hike cannot be ruled out. Australia’s equity market seems to be not worried much about this.”
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 3.2 per cent in extended trade this morning. Alphabet shed 4.6 per cent. Amazon reversed 5.07 per cent after beating on revenue, but missing on earnings.
Nasdaq futures slumped 1.38 per cent. S&P 500 futures dropped 0.46 per cent.
Going up
Investment managers surged after Janus Henderson beat Wall Street estimates. The dual-listed asset manager’s Australian shares soared 13.36 per cent, 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 10.22 per cent. Magellan jumped 4.62 per cent. Perpetual added 3.32 per cent.
Property stocks enjoyed another day in the sun as investors bet interest rate pressures will subside later this year. HMC Capital firmed 4.63 per cent, Centuria Capital 4.13 per cent and Mirvac 3.42 per cent.
The big four banks provided much of the weight behind today’s move, rising between 0.8 and 1.7 per cent. Wesfarmers added 0.96 per cent, Coles 0.89 per cent and Santos 0.94 per cent.
Going down
IAG shed 1.14 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.
Coal miners traded 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 eased 0.17 per cent to a two-month low. Whitehaven traded at its weakest since mid-November before bouncing 0.37 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.
Gold Road Resources reversed 5.51 per cent, Regis 5.41 per cent and West African Resources 6.03 per cent.
Bulk metal miners fell as iron ore prices extended this week’s retreat. Dalian ore prices dropped another 2 per cent this morning, following yesterday’s 3.3 per cent decline.
BHP gave up 2.25 per cent, Rio Tinto 2 per cent and Fortescue Metals 1.87 per cent.
Bega Cheese slid 2.37 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 the Asia Dow edge up 0.06 per cent and Japan’s Nikkei index firm 0.64 per cent. China’s Shanghai Composite declined 0.3 per cent. Hong Kong’s Hang Seng lost 0.67 per cent
Oil pared five days of falls. Brent crude bounced 26 US cents or 0.3 per cent to US$82.43 a barrel.
Gold inched up 70 US cents or 0.04 per cent to US$1,931.50 an ounce.
The dollar eased 0.07 per cent to 70.68 US cents.