The major banks and a surging tech sector helped the Australian sharemarket stage a surprising rebound on Wednesday as gold and lithium miners emerged as the major beneficiaries of the rolling commodity market chaos.
The local sharemarket ignored a weak overnight lead and shrugged off negative futures market sentiment to bound out of the gates and eventually arrest a three-session decline, having slipped to a five-week low on Tuesday amid the ructions in Eastern Europe.
Reserve Bank Governor Philip Lowe helped boost sentiment when he insisted the possibility of a rate hike – while live for 2022 – would not likely come until late in the year.
A strong performance by the Big Four banks, Telstra, and a swathe of tech names helped the ASX 200 enjoy a 1 per cent relief rally as the benchmark index gained 72.7 points to close the session at 7,053.0.
The broader All Ordinaries rose by 78.9 points, or 1.1 per cent, to close at 7,331.8 while the Aussie dollar hovered at around 72.82 US cents at the local close.
Investment giant Macquarie Group, toll road operator Transurban, retail conglomerate Wesfarmers and gaming machine operator Aristocrat Leisure were among Wednesday’s blue-chip winners, while near-record gold prices added shine to the precious metals producers.
Lithium stocks were also strong, although the rest of the mining and energy cohort was mixed, with commodity prices caught in a maelstrom of competing sanctions, supply shortages and sentiments.
The overnight announcement of a unilateral US energy import ban on Russia – as well as a procession of US multinationals closing their doors in Russia – ensured Wall Street remained negative and predictably added momentum to a rocketing oil price, which topped $US130 a barrel.
Further commodity market dislocation came after the London Metals Exchange halted trading in Nickel after its value tripled in two sessions from already heightened levels.
“If you’re not careful, in these markets you’re liable to get whipped up pretty fast if your eyes are not on the ball practically all the time,” IG Markets analyst Kyle Rodda said.
“The risk of broader dislocations are high, with the risk increasing money markets may spasm and fuel much tighter financial conditions from here.”
OANDA Asia-Pacific senior analyst Jeffrey Halley said Wednesday’s rise across Asian markets had been helped by suggestions Ukraine’s President is no longer demanding NATO membership, in what he said was being interpreted as an olive branch to Russia.
That said, Mr Halley pondered whether the rise was the result of investors being programmed to buy-the-dip, something which could “set markets up for the disappointment of another clutching-at-straws rally”.
“Asian markets … will remain glued to their news tickers for any new developments from Ukraine-Russia, or any negative developments that will negatively impact the commodity space,” Mr Halley wrote.
“Sentiment, as I said, remains fragile at best.”
Commonwealth Bank was the strongest of the local lenders on Wednesday, gaining 1.9 per cent to finish at $97.41.
Westpac rose 1.3 per cent to $21.96, ANZ climbed 1.1 per cent to $25.09 and National Australia Bank added 1.7 per cent to $28.98, while Macquarie Group finished 1.6 per cent higher at $178.55.
Afterpay owner Block helped tech shares higher with a 5.9 per cent rise to $141.20, assisted by a 6.4 per cent gain for Wisetech Global to $48.24, and a 1.8 per cent rise for Xero to $97.
Telstra jumped 3.2 per cent to $3.92 and REA Group rose 1.5 per cent to $128.32 to boost telco stocks.
Australia’s gold miners shone as the yellow metal continued to prove an attractive hedge against inflation, touching near record highs of $US2070 an ounce overnight.
There was a subsequent 1.9 per cent gain for Newcrest Mining to $28.20, a 1.8 per cent rise for Evolution for $4.50, and a 0.7 per cent lift for Northern Star to $10.95.
Lithium players were also among Wednesday’s gainers, with Pilbara Minerals up 6 per cent to $2.84, Allkem gaining 7.2 per cent to $9.86, Vulcan Energy 7.8 per cent higher at $8.87, Novonix rising 8.3 per cent to $5.10 and Mineral Resources up 2.6 per cent to $47.09.
BHP and Rio Tinto each slipped into the red, while Fortescue Metals gained 0.9 per cent to $18.83.
Woodside Petroleum gained 0.7 per cent to $33.20 and Origin rose 1.4 per cent to $5.86 on news of its $250 million buyback.
There was no such joy for Santos, Beach Energy, or Whitehaven Coal, which all finished lower.
