The Australian sharemarket managed to close a smidgen higher in a volatile trading session following the previous day’s bloodbath, with a surprisingly positive lead from Wall Street behind the recovery.
Thursday’s 3 per cent nosedive came as Russia began invading Ukraine and wiped a staggering $73bn from the value of the ASX. It was the biggest one-day dive in almost 18 months.
But on Friday, the benchmark S&P/ASX200 index finished just 7.2 points or 0.1 per cent higher at 6997.8, while the All Ordinaries Index added 20.5 points or 0.28 per cent to 7273.6.
Over the week, the local bourse lost 3.1 per cent.
Ord Minnett said the lift in US stocks erased most of the previous session’s losses, as investors found refuge in large-cap American technology shares.
The strong recovery was described by OANDA’s Asia Pacific senior market analyst, Jeffrey Halley, as “the mother of all reversals”.
“The stunning reversal by US equity markets … is telling,” Mr Halley said.
“The new round of sanctions announced by the US, Europe and the UK amongst others was notable for two things.
“Firstly, in President Biden’s own words, the mechanisms were there for energy exports to continue.
“Secondly, the Europeans baulked at shutting Russia out of SWIFT, the global interbank payments network. President Biden also made great store out of an impending global strategic petroleum reserve release.
“So, the limits to the economic pain that the ‘West’ was prepared to tolerate to support Ukraine and punish Russia have been revealed within 24 hours of Russia’s offensive beginning.”
CommSec analyst Steven Daghlian said it had also been a volatile session on Wall Street amid investor jitters and uncertainty, with stocks falling very heavily at one stage before staging a recovery.
“Bit of a surprise turnaround under the circumstances,” Mr Daghlian said.
“The European markets, though, tumbled and they’re obviously more exposed to Russia’s attack both geographically … and also the European Union buys about 40 per cent of its gas from Russia. A third of their oil comes from that part of the world.”
As a whole, the local energy sector was only marginally higher despite the oil price punching through $US100 per barrel for the first time in more than seven years before settling back.
But US-focused oil and gas explorer Helios Energy was a standout, rocketing more than 18 per cent to 13 cents.
Uranium stocks Boss Energy and Paladin Energy surged 13.3 per cent to $2.13 and 12.4 per cent to 77 cents, respectively.
The latter narrowed its first half net loss and said it was cashed up with no corporate debt.
The big winner by far was the tech sector, which followed an “incredibly powerful” recovery overnight by Wall Street’s Nasdaq, OMG chief executive Ivan Tchourilov said.
“Block Inc, which officially incorporated Afterpay in January, recorded its highest intraday gain since listing on the ASX,” he said.
“Block suffered some pretty heavy selling on the back of rising interest rates and has come out guns blazing in its first ASX reporting season.
“Last year, quarterly profit increased 47 per cent over the same period and net income came in $25m ahead of estimates.
“The tech company is also seeing decent returns from its Bitcoin venture in late 2020/early 2021.
“Smashing market projections went a long way to boosting share value. These were topped off by confident, forward-looking statements from the founder and CEO.”
Block shares soared 32.5 per cent to $153.75.
Harvey Norman booked a 22 per cent drop in first-half underlying profit, but when revaluations on its property portfolio were taken into account, the figure was just 6.7 per cent lower.
About 60 per cent of the company’s stores were closed for periods during the half, while the absence of JobKeeper payments and a spike in rental waivers for franchisees hurt the retailer in a way previous lockdowns did not.
Harvey Norman shares still rose, up 3.2 per cent at $5.15, with Ord Minnett describing its trading update to February 21 as “solid”.
Online-only retailer Kogan dropped 6.24 per cent to $5.26 despite record first-half gross sales and revenue, but adjusted earnings came in about 20 per cent lower than previously reported, RBC Capital markets said.
“Strong half-yearlies from Charter Hall and National Storage REIT propped the real estate sector up,” Mr Tchourilov said.
Charter Hall put on 3.69 per cent to $16.57, while National Storage gained 4.1 per cent to $2.54.
“Analyst upgrades for Qube Holdings and Reliance Worldwide did the same for industrials,” Mr Tchourilov said.
Qube rose 5.32 per cent to $2.97, while Reliance Worldwide jumped 6.3 per cent to $4.72.
ANZ fell 2.17 per cent to $26.10, Commonwealth Bank gave up 0.88 per cent to $93.88, National Australia Bank backtracked 1.6 per cent to $28.91 and Westpac shed 1.3 per cent to $22.83.
Rio Tinto slid 0.7 per cent to $114.54 and BHP eased 0.18 per cent to $44.69, but Fortescue lifted five cents to $18.60.
The Aussie dollar was fetching 71.97 US cents, 53.52 British pence and 64.11 Euro cents in afternoon trade.
