Commodity gains help market rise for fourth day – The Market Herald

The share market regained 7000 as its longest winning run in more than a month entered a fourth day.

The S&P/ASX 200 rallied 39 points or 0.56 per cent by mid-session to 7004.

On-going rebounds in crude, gold and silver lifted energy producers and precious metal miners. Ramsay Health Care and Link Administration sank after takeover schemes ran into trouble.

What’s driving the market

A fourth straight advance on Wall Street gave the local market a solid platform for further gains. The ASX 200 has bounced more than 270 points or 4 per cent in four sessions.

The recovery has come as US investors anticipate a decline in headline inflation tonight will allow the Federal Reserve to slow its current aggressive pace of rate increases. The S&P 500 climbed 1.06 per cent overnight to a two-week high.

“US stock markets rallied for a fourth straight session on hopes that cooling economic data and inflation will allow the Fed to slow the pace of its rate hiking cycle after the Sep FOMC meeting,” Tony Sycamore, market analyst at City Index, said.

“The rapid fall in oil prices is expected to see headline inflation in August fall by 0.1% MoM and the annual rate slowing to 8.1% (from 8.5%),” he added.

Also helping sentiment on the ASX were recoveries in commodity prices as the US dollar pulls back from two-decade highs.

“A risk-on tone across markets saw commodity markets push higher. This was helped by a weaker USD, which boosted investor appetite,” ANZ’s senior commodity strategist Daniel Hynes said.

Silver jumped 5.8 per cent to a sixth straight gain. Gold closed at its highest level of the month. Nickel rallied almost 7 per cent. Brent crude logged a third straight advance.

A report this morning showed business confidence remained strong last month, boosted by favorable trading conditions. NAB’s confidence index rose three points to +10. Conditions improved by a point to +20.

“The recent strength in business conditions carried into August,” NAB Group Chief Economist Alan Oster said. “Official data for retail sales in July confirmed spending remained robust, as suggested by the previous survey, and today’s release shows little sign that August was much different. Conditions are strong across most industries other than construction, where profitability remains a challenge.”

Consumers remained more cautious. Westpac’s consumer sentiment gauge edged up 3.9 per cent but at 84.4 remained near historic lows. The rise was the first since November 2021.

“Consumers may be a little less fearful, but confidence remains very weak. Index reads in the 80-85 range mean pessimists still greatly outnumber optimists,” Westpac chief economist Bill Evans said.

Going up

The morning’s best performers were a mix of miners and growth stocks. Explorer Chalice Mining rallied 9.33 per cent, BrainChip 5.79 per cent, Core Lithium 5.03 per cent and City Chic Collective 4.93 per cent.

Among the heavyweights, property giant Goodman gained 2.24 per cent, retail conglomerate Wesfarmers 1.42 per cent and CBA 1.2 per cent. Energy producers Santos and Woodside added 1.88 and 1.61 per cent, respectively.

AGL Energy firmed 1.05 per cent after reporting a delay in restarting a unit at the Loy Yang A coal power station in Victoria would not have a material impact on earnings. The outage at Unit 2 is now expected to extend to the second half of October while a part is manufactured overseas. The hit to earnings will be offset by a strong performance in other units.

Rare earths mines Lynas shrugged off news of water supply issues at its Malaysian plant. A “catastrophic equipment failure” at the local supplier was expected to affect production for at least another week. The share price edged up 0.4 per cent.

Atlas Arteria was placed in suspension for an equity capital raising to fund the purchase of a two-thirds interest in a US toll road. The tollway operator will pay US$2.023 billion for a 66.67 per cent majority interest in the Chicago Skyway toll road.

Going down

Ramsay Health Care skidded 11.08 per cent after a consortium led by KKR declared it would not improve its revised takeover offer for the private hospital operator. The Ramsay board said it had not had time to consider the correspondence from the consortium. KKR told the firm it would be willing to re-engage if Ramsay reset its valuation expectations.

Link Administration slumped 20.54 per cent after a takeover proposal ran into a regulatory hitch in the UK. The UK financial regulator warned Link’s prospective suitor Dye & Durham could be liable for up to $519 million to cover redress payments for the failed Woodford Equity Income Fund relating to a Link subsidiary’s role as fund administrator.

Link said it did not agree with the UK regulator’s view. Link Group considers any liability to be confined to Link Fund Solutions Limited. Dye & Durham had yet to indicate its position on the matter.

The images fell 2.22 per cent to 22 cents after announcing an institutional placement at 20 cents to raise $80 million. Funds will be used to develop the oncology firm’s three platform technologies.

Other markets

A morning of modest gains on Asian markets saw the Asia Dow add 0.24 per cent, China’s Shanghai Composite 0.18 per cent, Hong Kong’s Hang Seng 0.29 per cent and Japan’s Nikkei 0.16 per cent.

US futures were little changed. S&P 500 futures inched up three-quarters of a point or 0.02 per cent.

Oil retreated for the first time in four sessions. Brent crude declined 57 US cents or 0.6 per cent to US$93.43 a barrel.

Gold pulled back from a two-week high. The yellow metal fell US$8 or 0.5 per cent to US$1,732.60 an ounce.

The dollars reversed 0.4 per cent to 68.65 US cents after brushing 69 cents overnight.