The ASX bounced back after three straight days of losses, with tech stocks the big winners, while baby formula makers saw more action.
The Australian sharemarket bounced back after three days of weakness, enough to claw back those losses for much of the session, but ran out of steam.
The benchmark S&P/ASX200 index closed 0.54 per cent stronger at 7311.7, while the All Ordinaries Index gained 0.64 per cent to 7620.2.
Wall Street also snapped a three-day losing streak overnight after the US earnings season kicked off, with three companies — JP Morgan Chase, Blackrock and Delta Airlines — beating expectations with most of their numbers, CommSec analyst Steven Daghlian said.
OMG chief executive Ivan Tchourilov said the other big news out of the US was a consensus between the heads of the Reserve Bank to roll back stimulus, with the economy warmed up and raring to go.
Tech stocks rose after longer-term bond yields eased in the US, Mr Daghlian said.
The sector pared this month’s losses, unhindered by expected interest rate hikes, Mr Tchourilov said.
Logistics software provider Wisetech Global leapt 7.17 per cent to $53.51, accounting software firm Xero advanced 5.28 per cent to $143.04, buy-now-pay-later market leader Afterpay shot up 4.49 per cent to $120.68 and smaller rival Zip jumped 4.22 per cent to $6.92.
Mr Tchourilov said September labour force figures came in at the more bullish end of estimates, with the 138,000 jobs lost quite below a few forecasts, giving confidence to investors.
“Meanwhile, the market will be anxious to see October’s numbers as a measure of economic recovery, as NSW will have been out of lockdown for most of the month,” he said.
In the mining sector, Rio Tinto rose 1.15 per cent to $100.51, BHP lifted 0.56 per cent to $37.80, Fortescue gained 2.29 per cent to $14.32 and South32 rallied 4.93 per cent to $3.83 after announcing it would buy a 45 per cent interest in the Sierra Gorda copper mine in Chile.
S&P Global Ratings said the debt and cash acquisition increased South32’s commodity diversification and exposure to base metals, but the mine had comparatively high operating costs and also upped the company’s exposure to higher-risk jurisdictions, along with its recent investment in Mozal Aluminium in Mozambique.
Perseus Mining rocketed 9.36 per cent to $1.69 after reporting positive exploration results at its Yaoure gold mine in Cote d’Ivoire.
Whitehaven Coal released its September quarter production report, showing coal sales had fallen by 23 per cent, but the energy shortage had sent prices rocketing.
Its shares slipped 2.12 per cent to $3.23.
Financial services firm Netwealth surged 15.6 per cent to $16.52 after reporting a surge in funds under administration.
Mr Tchourilov said the $4bn inflow set a company record, as did HUB24, which brought in $3bn, sending its shares 8.73 per cent higher to $31.25.
“Independent wealth platform providers continue to build momentum, while incumbents like AMP struggle for market share,” he said.
“Looking at a five-year performance, AMP has lost close to 80 per cent in share price, compared to Netwealth, which has returned 445 per cent since listing in 2017.”
AMP shares slipped 2.2 per cent to $1.10.
Australian KFC and Taco Bell franchisee Collins Foods reported it was buying nine more KFCs in The Netherlands, bringing its network there to 44, representing 55 per cent of the market.
Collins Foods said the acquisitions would not count towards its target of up to 130 new KFC restaurants over the next 10 years.
Its shares dipped 0.37 per cent to $13.32.
Print-on-demand firm Redbubble provided a first quarter trading update, showing a 28 per cent fall in marketplace revenue, which excludes the artist’s margin.
“It was held back most by a decline in the sale of masks, which of course surged at the height of the pandemic but are starting to fade now,” Mr Daghlian said.
Redbubble said the results were in line with its expectations — which Mr Tchourilov described as “bearish” — and its shares slumped 12.5 per cent to $3.99, just below RBC Capital Markets’ $4 price target.
“The previously announced guidance wasn’t enough to cushion a price drop,” Mr Tchourilov said.
“What goes up must come down, and online retailers that saw a boom during Covid lockdowns are set for a harsh correction now that vaccination rates approach high levels.
“Still, Redbubble is trading 200 per cent above its pre-Covid high.”
RBC analyst Chami Ratnapala said some numbers in Redbubble’s update disappointed, noting improving monthly revenue trends towards September, but the marketing investment to support this was higher than expected.
a2 Milk, which rode high on Wednesday after fellow infant formula manufacturer Bubs Australia provided a September quarter update showing a strong rebound in its China-facing business, gained 4.26 per cent to $6.86.
But Bubs retreated 3 per cent to 48.5 cents after soaring almost 39 per cent on Wednesday, which was the best day of the year for both companies.
Macquarie said the read-through that Bubs’ improving fortunes could signal a turning point for a2 may be premature.
“While Bubs’ commentary appears positive for a2, the relative scale and channel rebalancing impacts are different, and a2 is more impacted by weak China birthrate and competition,” Macquarie said, giving a2 a 12-month price target of $5.40.
Energy stocks were among the few drags on the market, perhaps due to profit-taking after being the best-performing sector over the past month, Mr Daghlian said.
Santos eased 1.34 per cent to $7.34 and Origin dipped 0.39 per cent to $5.05.
ANZ backtracked 0.72 per cent to $27.58, Commonwealth Bank gave up 1.27 per cent to $101.91, National Australia Bank inched four cents higher to $28.58 and Westpac eased three cents to $25.27.
The Aussie dollar was buying 73.87 US cents, 54.04 British pence and 63.72 Euro cents in afternoon trade.
Originally published as Australian sharemarket gains ground after three straight days of losses