Four on the trot for the Aussie market

The local sharemarket advanced for a fourth straight day on Thursday, with a strong performance by the energy and mining sectors outweighing losses by three of the big four banks. The benchmark S&P/ASX200 index closed up 34.2 points, or 0.5 per cent, to 6845.1, with the broader All Ordinaries rising 37.2 points, also 0.5 per cent, to 7042.3.
 
Driving Thursday’s gains were a 2.4 per cent rise in the energy sector and a 1.7 per cent lift in the materials sector.
 
Among the big miners, BHP rose 92 cents, or 2.4 per cent, to $39.46; Rio Tinto lifted 74 cents, or 0.8 per cent, to $92.60; and South32 climbed 11 cents, or 3 per cent, to $3.75. But iron ore heavyweight Fortescue Metals retreated 6 cents, or 0.4 per cent, to $16.07. In the energy sector,  heavyweight oil and gas producer Woodside gained $1.10, or 3.2 per cent, to $36; Santos added 15 cents, or 2 per cent, to $7.76; Beach Energy added 4 cents, or 2.6 per cent, to $1.60; and Brazilian producer Karoon Energy was also up 4 cents, in its case up 1.9 per cent, to $2.13.
 
Coal, lithium lead resources
 
Coal stocks returned to what their shareholders have recently come to expect as normal service, with sector star Whitehaven Coal adding 31 cents, or 3.3 per cent, to $9.83; New Hope Corporation gaining 12 cents, or 1.9 per cent, to $6.31; Terracom jumping 5 cents, or 5.1 per cent, to $1.03; and Yancoal Australia advancing 9 cents, or 1.7 per cent, to $5.55.
 
In lithium, producer Pilbara Minerals gained 13 cents, or 2.6 per cent, to $5.11; fellow producer Allkem put on 11 cents, or 0.8 per cent, to $14.47; IGO, which mines lithium and nickel, was down 13 cents, or 0.8 per cent, to $16.31; and Mineral Resources, which mines iron ore and lithium, shed 32 cents, or 0.4 per cent, to $76.58. Lithium project developer Core Lithium, which is building the Finniss lithium project south of Darwin, lost 7.5 cents, or 5.2 per cent, to $1.38 as a prospective supply deal with Tesla fell through. Rare earths producer Lynas Corporation gained 44 cents, or 5.6 per cent, to $8.34.
 
But the big banks lost ground after ANZ warned of a deteriorating macro-economic outlook while posting a better-than-expected full-year profit of $6.5 billion. The bank also forecast higher costs than the market was expecting. ANZ shares slipped 85 cents, or 3.3 per cent, to $24.99; Westpac eased 24 cents, or 1 per cent, to $23.77; and NAB lost 17 cents, or 0.5 per cent, to $31.90. CBA went against the trend, advancing 42 cents, or 0.4 per cent, to $102.42. Investment bank Macquarie added 54 cents, or 0.3 per cent, to $166.54.
 
Among the major industrials, biotech star CSL gained 64 cents to $275.95, Wesfarmers was up 16 cents to $44.54, Telstra was down 3 cents to $3.85, Woolworths lifted 23 cents, or 0.7 per cent, to $32.56 and Coles was up 5 cents to $16.21.
 
US economy returns to growth
 
The US economy posted its first period of positive growth for 2022 in the third quarter, the Bureau of Economic Analysis reported overnight. US GDP accelerated at 2.6 per cent pace in the third quarter, stronger than the 2.3 per cent growth rate expected by economists’ consensus, at least temporarily easing recession fears.
 
The GDP figure didn’t exactly help the market head north, although the 30-stock Dow Jones Industrial Average gained 194.2points, or 0.6 per cent, to end at 32,033.3 for its fifth straight daily rise. Shares of Caterpillar, McDonald’s and Honeywell led the Dow higher after the companies reported better-than-expected earnings. The Dow traded up as much as 549 points during the day.
 
But the tech-heavy Nasdaq Composite had lead in its saddlebags on the back of disappointing results from big tech names. Amazon reported third-quarter results that missed analysts’ estimates, and also gave a disappointing sales forecast for the fourth quarter, and the stock was hammered, losing 16 per cent. It was an even worse story for shareholders in Meta Platforms – parent of Facebook, Instagram and WhatsApp – which sank a further 24.6 per cent after slumping by 17 per cent on its weak third-quarter earnings reported on Wednesday. Meta Platforms also said it would lose even more money next year building out the “metaverse,” news that led to several analysts downgrading the stock. These and other woes saw the Nasdaq Composite lose 178.3 points, or 1.6 per cent, to 10,792.7, while the broad S&P 500 eased 23.3 points, or 0.6 per cent, to 3,807.3.
 
Bonds rallied, pushing the US 10-year Treasury note yield below 4 per cent for the first time since October 13, to 3.924 per cent. The more policy-sensitive 2-year Treasury note was unchanged at 4.282 per cent.
 
In Europe, the Stoxx 600 added 0.1 per cent after the European Central Bank (ECB) announced a 75-basis-point interest rate hike – its third consecutive increase this year – while also revealing new conditions for European banks.
 
In commodities, gold eased US$5.24, or 0.3 per cent, to US$1,662.02 an ounce, Brent Crude oil lifted US$1.27, or 0.3 per cent, to US$96.96 a barrel, and West Texas Intermediate crude slid 42 cents, or 0.5 per cent, to US$88.66 a barrel. Iron ore fell US$1.05 to US$93.56 a tonne.
 
The Australian dollar is buying 64.54 US cents, down from 64.98 US cents at the local close yesterday.

Drew Meredith

Drew is publisher of the Inside Network's mastheads and a principal adviser at Wattle Partners.