The Australian sharemarket edged higher, racking up its third straight day in the green, buoyed by the tech sector, miners and an impressive quarterly result by National Australia Bank.
After a positive lead from Wall Street led by the tech-heavy Nasdaq, the local bourse started strongly but faded in the first few hours of trade.
The benchmark S&P/ASX200 index closed 20.2 points or 0.28 per cent firmer at 7288.5 while the All Ordinaries Index added 22.7 points or 0.3 per cent to 7595.5.
CommSec analyst Tom Piotrowski said a breakout of optimism in northern hemisphere markets overnight was made even more impressive coming ahead of the release of US inflation data on Thursday night.
IG market analyst Kyle Rodda said despite the recent drop in general market volatility, there remained a nervousness about US monetary policy, especially as it related to the number of rate hikes this year by the Federal Reserve.
“Headline CPI tonight is tipped to publish at 7.2 per cent, which if met or beaten, will mark the highest annualised rate of inflation in the States since the recessionary days of Paul Volker’s Fed in 1982,” Mr Rodda said.
“It’s a high bar, but if that number is exceeded, it could set off fresh volatility.”
Mr Piotrowski said as many as five rate hikes were being spoken of for the US in 2022.
After falling 18 per cent in January, the tech sector was by far the best performer on the ASX on Thursday, with Afterpay acquirer Block surging 9.7 per cent to $158.01.
Nuix jumped 5.3 per cent to $1.59 after announcing the Australian Securities and Investments Commission had finished its probe into the software company’s 2018, 2019 and 2020 financial statements, and determined it would not take any further action.
But its investigation into Nuix’s market disclosure since listing in December 2020 is not yet complete.
NAB rose 4.5 per cent to $29.67 after booking quarterly cash net profit of $1.8bn, well ahead of the run-rate required to meet JP Morgan’s first half forecast of $3.2bn.
NAB chief executive Ross McEwan said home lending in Australia grew 2.6 per cent and SME business lending increased 3.4 per cent over the December quarter.
JP Morgan said the bank’s very strong revenue trajectory demonstrated it was delivering in both the mortgage and business markets.
But OMG chief executive Ivan Tchourilov noted NAB’s net interest margin had declined by 5 basis points.
ANZ improved 1.06 per cent to $27.71, Commonwealth Bank gained 1.23 per cent to $100.78 and Westpac rose 1.07 per cent to $22.62.
AMP’s full-year results were positively received, with S&P Global Ratings saying its 53 per cent rise in underlying net profit to $356m reflected the positive momentum of AMP Bank, which had achieved above-average loan growth.
“We consider that a turnaround of AMP’s wealth management activities is starting to take shape, notwithstanding a decline in earnings from the business in 2021,” the ratings agency said.
“We believe AMP is well progressed in the demerger of its private markets business, expected to be completed in the first half of calendar 2022.
“Post-demerger, we expect a more streamlined operating structure for the remaining businesses with earnings contributions predominantly from banking and wealth management activities.”
AMP jumped 5.94 per cent to $1.07.
Aftermarket automotive parts retailer Bapcor surged 10 per cent to $7.15 after falling on the back of its first half results on Wednesday amid reports about speculation it was a takeover target.
“The company reported roughly in-line with guidance yesterday, making the sell-off from the market a bit unexpected,” Mr Tchourilov said.
“However, the buyback today has wiped out those losses.”
Engineering group CIMIC slumped 7.13 per cent to $15.89 after booking its full-year numbers.
“The multinational contractor reported a mixed bag of results earlier today, with total revenue up 8.3 per cent,” Mr Tchourilov said.
“However, the dividend declared is down 40 per cent, proving that investors are concerned with value.”
In the same sector, Downer EDI shed 2.5 per cent to $5.45 after reporting higher half-year profits but also labour shortages affecting work flow and delaying new projects.
Nanosonics added 4.66 per cent to $4.72.
“It’s been a volatile week for the ultrasound probe disinfector provider following its shock announcement of a change in sales agreement with GE Healthcare for North America,” Mr Tchourilov said.
In the mining sector, rare earths explorer Arafura lifted 4.88 per cent to 21.5 cents after delivering a conference presentation, xjmtzywRio Tinto put on 2.09 per cent to $118.96, BHP eased four cents to $48.28 and Fortescue bounced 3.97 per cent to $22.28.
The Aussie dollar was fetching 71.75 US cents, 53 British pence and 62.77 Euro cents in afternoon trade.
