ASX200 briefly pierces key resistance level of 7400

The ASX was propelled higher by a strong US lead, briefly piercing a key psychological level, with property and resources among the winning sectors.

The Australian sharemarket climbed higher after a strong lead from Wall Street, breaching a key resistance level it could not maintain.

The benchmark S&P/ASX200 index firmed 0.35 per cent to 7379.3, while the All Ordinaries Index gained 0.39 per cent to 7697.5.

OMG chief executive Ivan Tchourilov said the market had a strong start and gained momentum throughout the session before a last minute dip.

“On the international scene, hospitalisation rates are still relatively low in South Africa, boosting sentiment among nations that have yet to face a full-blown Omicron outbreak,” he said.

“There’s no concrete evidence that Omicron is less deadly than other variants, but the market seems to be slowly forming that view on its own.

“Markets have also bounced back on November US inflation data, which was in line with expectations that had come in above official forecasts.”

IG markets analyst Kyle Rodda said Wall Street closed at a record high on Friday after the inflation numbers, with Asian indices rising and US futures climbing on Monday.

“Essentially, the data gave no additional impetus for the Fed to slam the brakes on the economy to control inflation, even if progressive tightening, at least by way of a faster taper, will be required to take some steam out of the US economy,” Mr Rodda said.

“There have been some regional factors supporting sentiment, and the big one has been the increased likelihood of stimulus from Chinese policymakers.”

He said the ASX200 remained range-bound, meeting resistance at the key psychological level of 7400, but momentum was to the upside.

Mr Tchourilov said real estate was the leading sector on the local bourse and had been on a hot streak.

Charter Hall Retail REIT added 2.88 per cent to $4.29, while Shopping Centres Australasia Property Group advanced 3.85 per cent to $2.97.

Energy was also in the green after the oil price rose, recovering from a sell-off late last week, Mr Tchourilov said.

Beach Energy appreciated 3.35 per cent to $1.23, Santos lifted 1.85 per cent to $6.60 and Woodside put on 1.14 per cent to $22.28.

Mr Tchourilov said iron ore producers boosted the materials sector.

Prices for the steel making commodity were weaker on Friday but still held comfortably above the $US100 per tonne mark, he said.

Champion Iron surged 5.4 per cent to $4.87, Pilbara Minerals rose 3.85 per cent to $2.70, Rio Tinto improved 2.32 per cent to $98.05, BHP gained 2.7 per cent to $41.04 and Fortescue firmed 1.99 per cent to $18.46.

BHP advised the talks it has been holding with Andrew “Twiggy” Forrest’s Wyloo Metals in a bid to secure its support for the mining giant’s takeover offer for Canada’s Noront Resources had ended, with no agreement reached.

BHP has bid 75 Canadian cents per share, but Wyloo has upped the ante in the ongoing battle, lobbing a fresh bid of $C1.10 per share.

Wyloo has a 37 per cent stake in Norton and Mr Forrest has previously said shareholders had “lost hope” in the nickel and copper junior after years of little progress, urging them to “come along for the ride” with his company.

Mineral sands miner Iluka Resources was a strong performer, jumping 5.3 per cent to $9.92.

Crown Resorts was steady at $11.45 after holding its investor day, saying staff shortages were a “significant issue” across the business and making no mention of the latest takeover offer from US private equity group Blackstone.

The casino operator earlier this month advised it had thrown open its books to allow Blackstone to conduct due diligence, urging it to make a better offer.

Real estate media group Domain put on 3.5 per cent to $5.62 after entering into an agreement to amend its existing debt facilities, giving it access to a total of $355m, which it will use for general corporate and working capital purposes.

Insurance Australia Group dropped 3.64 per cent to $4.24 after another analyst downgrade.

“This morning’s hit came from UBS, who cut a whopping 20 per cent off its target price and whacked it with a sell rating,” Mr Tchourilov said.

“A few days ago, IAG came out sticking to its FY22 guidance in a business update presentation.

“However, they noted an increased perils allowance on the back of severe weather in a changing climate report.

“The underlying business didn’t take any major hits throughout Covid, but being an insurer of natural disasters in the present day comes with a lot of uncertainty.

“And that uncertainty is only going to get worse in the medium term, at least, while dealing with the impacts of our changing climate.”

Ramsay Health Care dipped 0.94 per cent to $68.85 after announcing the acquisition of UK-based mental healthcare provider Elysium Healthcare for $1.4bn.

ANZ gave up 0.36 per cent to $27.37, Commonwealth Bank lifted 0.13 per cent to $98.03, National Australia Bank backtracked 0.49 per cent to $28.49 and Westpac declined 0.14 per cent to $20.82.

Netwealth Group was the best performing stock in the top 200, leaping 6.2 per cent to $16.95.

The Aussie dollar was fetching 71.73 US cents, 54.08 British pence and 63.48 Euro cents in afternoon trade.

Originally published as Wall Street surge buoys Australian sharemarket, ASX200 briefly pierces key resistance level of 7400

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