The ASX shrugged off Wall Street and commodity price falls as bargain hunters pounced on cheaper mining and energy stocks.
The Australian sharemarket climbed higher despite Wall Street and commodity price falls as bargain hunters bought up resources stocks.
After tumbling 2.1 per cent on Monday – the worst fall in seven months – the benchmark S&P/ASX200 index firmed 0.35 per cent to 7273.8.
The All Ordinaries Index lifted 0.33 per cent to 7563.1.
CommSec analyst Steve Daghlian said the local bourse performed “nowhere near” what futures were suggesting, despite concerns Chinese property giant Evergrande could collapse.
“We’ve completely shaken off the declines from the US market last night – it was the worst day in four months, down by about 1.7 per cent,” Mr Daghlian said.
OMG chief executive Ivan Tchourilov said another “bloodbath” had been expected on the local market.
Resources stocks were seemingly unaffected by a massive fall in commodity prices overnight.
Mr Daghlian said it appeared a little puzzling and counterintuitive that iron ore miners stood out.
“The iron ore price … fell by 6.7 per cent in the past day and has fallen to a 16-month low,” he said.
“It’s down 60 per cent from the highs hit back in the middle of May. But keep in mind yesterday we had significant declines for most of the iron ore players and they’ve also been the hardest hit since the start of this month.
“Some bargain hunters perhaps jumping in and taking advantage of the recent sell-off.”
Rio Tinto improved 0.49 per cent to $95.71, BHP added 0.59 per cent to $37.75, Fortescue lifted 0.34 per cent to $14.75, Mount Gibson Iron rallied 6.17 per cent to 43 cents and Champion Iron gained 4.24 per cent to $4.67.
“Keep in mind Champion Iron is still trading 26 per cent down from the end of August, with investors looking towards iron ore futures for guidance,” Mr Tchourilov said.
The energy sector strengthened after falling about 3 per cent on Monday, with Woodside rising 1.65 per cent to $20.92, Oil Search putting on 1.08 per cent to $3.76 and its takeover suitor Santos appreciating 1.14 per cent to $6.19.
“Oil supply woes have been extended in the US, however, concern over the Chinese property sector is putting a cap on the recent price spike,” Mr Tchourilov said.
ANZ inched one cent higher to $27.15, Commonwealth Bank declined 0.47 per cent to $100.34, National Australia Bank backtracked 0.88 per cent to $27.10 and Westpac shed 0.44 per cent to $25.19 while Macquarie Group retreated 1 per cent to $171.93.
AusNet went into a trading halt at $2.36 after receiving an improved indicative cash and scrip takeover offer from gas pipeline business APA Group.
The power lines operator it was able to engage with the company once its exclusivity period with rival suitor and Canadian asset management giant Brookfield concluded.
Brookfield lobbed a sweetened indicative bid of $2.50 per share on Monday and is conducting due diligence on AusNet, which says there is no certainty it will lead to a binding offer.
Retailer Kathmandu released its preliminary full-year report, flagging a massive profit surge and reporting strong sales performance by Rip Curl and Oboz, driven by more people surfing and hiking.
Boss Michael Daly said Rip Curl’s wholesale order books were now significantly above pre-Covid levels, while the forward order book for Oboz was at its highest level ever.
But Kathmandu stores continued to be hit by ongoing lockdowns and travel restrictions, including during the key winter trading period.
Covid restrictions had also driven up freight costs and caused delivery delays.
Shares in the group dropped 1.4 per cent to $1.41.
Coal miner New Hope advanced 4.37 per cent to $2.15 after reporting a return to full-year profitability.
Crop protection specialist Nufarm continued to trade strongly, rising 4.23 per cent to $4.68.
“Nufarm has found its footing after a death cross in early August, and a breakout above the 200 day moving average here could indicate an uptrend for technical traders,” Mr Tchourilov said.
In economic news, the Reserve Bank of Australia board released the minutes of its latest meeting, saying economic recovery from the highly infectious Delta variant could be slower than the rebound earlier in the pandemic, given restrictions would likely be lifted gradually.
“The RBA’s updated assessment is now more in-line with the view of Commonwealth Bank group economists, who do not expect a return to the robust pre‑Delta economic growth path until the second half of 2022,” CommSec senior economist Ryan Felsman said.
The weekly ANZ-Roy Morgan consumer confidence rating rose by 0.2 per cent to a nine-week high of 103.3, compared to a long-run average since 1990 of 112.5, while the CBA Household Spending Intentions Series revealed retail spending plans were soft in August, but showed some stabilisation from recent declines.
The Aussie dollar was fetching 72.77 US cents, 53.14 British pence and 61.98 Euro cents in afternoon trade.
Originally published as Australian sharemarket shakes off Wall Street, commodity price falls as bargain hunters pounce on resources stocks
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