The Australian sharemarket made a strong start to the week after it had sagged into the weekend amid the rolling conflict in Ukraine.
Renewed investor confidence propelled the price of shares in almost every local sector on Monday despite uncertainty over the war in Eastern Europe and an associated leap in fuel prices.
Materials was a poor performing outlier but the sector’s slump wasn’t enough to stop a buoyant benchmark ASX 200 from rising by 85.80 points or 1.21 per cent to finish the session at 7149.4.
The broader All Ordinaries rose by 82.90 points, or 1.13 per cent, to close at 7422.2 points, while the Australian dollar remained steady at 70.3 US cents.
Local investors appeared to shrug off any fears that might have been sparked by a poor overnight performance by the three major indices on Wall Street, where the S&P500 has had its worst week since mid-January.
OANDA analyst Edward Moya said US investors were cautiously buying risky assets as global geopolitical tensions simmer.
“We’ve seen this movie before over the past couple of weeks … Russia signals an openness for talks and then shortly after their military has made further advancements or repositioned themselves,” he said.
The disruption caused by Russia’s invasion of Ukraine is expected to force the US Federal Reserve to this week to announce its first interest rate hike since the pandemic.
The markets there will remain in limbo until a mexjmtzyweting scheduled for Wednesday US time, where the Fed is forecast to raise rates by at least 25 basis points.
Tribeca Alpha Plus portfolio manager Jun Bei Liu said the Australian sharemarket had defied expectations to make a surprisingly strong start to the week.
“Most of us thought that today would be a pretty negative lead, but the market has shaken off all the negativity in the US and elsewhere overseas,” she said.
“It should be another volatile week ahead. As we have seen over the past few months, it’s very hard to see a straight line because we’ll still have a war happening and inflation is running away.”
The Australian financial sector rallied on Monday to reverse some of the losses felt after a week of sell-offs prompted by investor fears about the Ukrainian conflict.
Financials fared the best overall of any local sector to close the session up 2.46 per cent and make up three of the day’s 10 strongest performers.
Investment management group Pendal Group lead the financials pack with a 6.56 per cent gain to close at $0.28.
The big banks all performed well, with Macquarie Group shares climbing 2.56 per cent to $187, Commonwealth Bank rising 2.64 per cent to $102, NAB up 1.47 per cent to $30.38 and Westpac increasing 2.47 per cent to $23.23.
Shares in Magellan Financial Group, however, tumbled again to end the session 1.4 per cent lower at $14 as investors continue to pull out of the besieged fund manager.
Healthcare performed second best of the 11 local sectors on Monday, with major players CSL and Cochlear Limited enjoying respective gains of 2.63 per cent to $263.27 and 2.03 per cent to $218.57.
The materials sector declined after iron ore lost 1.2 per cent to $US154.5 a tonne and the big players Rio Tinto, BHP, Fortescue Metals subsequently had an off day.
Australian agribusiness giant Elders topped the consumer staples sector and secured the day’s biggest gains on the index, rising 11 per cent to $13.32.
Uranium miner Paladin Energy was the weakest performer of the session, dropping by 7.47 per cent to $0.81.
