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The Australian share market has ended Wednesday with a late move into positive territory, recovering from a midday slump to catch up with a strong overnight lead from Wall Street.
The benchmark S&P/ASX200 index closed 9.5 points, or 0.17 per cent, higher at 5,761.4 points on Wednesday, while the broader All Ordinaries index ended up 4.6 points, or 0.08 per cent, at 5,863.7 points.
The big four banks edged ahead at the close, but the miners and energy companies remained largely flat on a day of lacklustre trade.
CMC Markets chief market strategist Michael McCarthy said local markets essentially failed to launch following strong overnight rallies on Wall Street.
"The big bounce-back overnight in US stocks counts for nothing here as Asia-Pacific traders have reacted to the latest Sino-US tit-for-tat trade tariffs with great caution," Mr McCarthy said.
Wall Street optimism for a rich earnings season offset trade war concerns arising from a new round of proposed US trade tariffs on $50 billion worth of Chinese imports, announced overnight.
After slipping as much as 0.4 per cent in morning trade, the S&P/ASX200 began to rise after lunch, following the release of better-than-expected retail data and some opportunistic buying, Mr McCarthy said.
Australia's major four lenders turned around a slow start to end higher, but for ANZ, which lost one cent, or 0.04 per cent, to $26.54.
Commonwealth Bank rose 54 cents, or 0.8 per cent, to $72.80, Westpac added 11 cents, or 0.4 per cent to $28.74, while the National Australia Bank gained eight cents, or 0.3 per cent, to $28.51.
"Banks are flat but still good value, caught between strong valuation and income argument on the one hand and concerns about reputation and regulatory impacts on the other," Mr McCarthy
Despite a slight fall in global oil prices, Oil Search gained 1.7 per cent, to $7.20 and Woodside Petroleum was up 0.7 per cent to $29.65, while takeover target Santos lost 0.9 per cent, to $5.84 after strong gains on Tuesday.
In commodity markets, gold recovered some of its overnight losses but local goldminers remained significantly lower, Newcrest mining the worst, down 1.5 per cent, to $19.72.
Elsewhere, Murray Goulburn's listed MG Unit Trust, was up 0.5 per cent at 95.5 cents after Canadian dairy giant Saputo's takeover was approved by the competition regulator.
Australian Agricultural Company was 10 cents, or 8.2 per cent lower, at $1.12 after the beef producer warned of a full-year earnings loss of $30 million to $40 million.
Flight Centre lost 1.1 per cent, to $56.66 after the Federal Court ordered it pay a $12.5 million fine for price fixing in a long-running case brought against it by the ACCC.
Better-than-expected retail spending data gave the Australian dollar a leg up, rising from 76.84 US cents just before the data was released at 1130 AEST to 77.02 US cents at lunch.
At 1700 AEST, the local currency was back to 76.93 US cents, down from 77.04 US cents on Tuesday.
ON THE ASX:
* The benchmark S&P/ASX200 closed down 9.5 points, or 0.17 per cent, at 5,761.4 points
* The broader All Ordinaries index was up 4.6 points, or 0.08 per cent, at 5,863.7 points
* The SPI200 futures contract was up 22 points, or 0.38 per cent, at 5,743 points.
* National turnover was 3.4 billion securities traded worth $6.5 billion
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 76.93 US cents, from 77.04 on Tuesday
* 82.04 Japanese yen, from 81.59 yen
* 62.71 euro cents, from 62.52 euro cents
* 54.68 British pence, from 54.76 pence
* 105.59 NZ cents, from 106.12 cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,334.488 per fine ounce, from $US1,341.11 per fine ounce on Tuesday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 2.059pct, from 2.0372pct on Tuesday
* CGS 4.75pct April 2027, 2.6123pct, from 2.5868pct
Sydney Futures Exchange prices:
* June 2018 10-year bond futures contract was 97.36 (implying a yield of 2.63pct), from 97.38 (2.62pct) on Tuesday
* June 2018 3-year bond futures contract was 97.82 (2.180pct), from 97.845 (2.155pct).
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)
Wall Street’s three major indexes staged a comeback to close around 1 percent higher on Wednesday as investors turned their focus to earnings and away from a trade conflict between the United States and China that wreaked havoc in earlier trading.
After investors fled equities in the morning due to proposed retaliatory tariffs from China, their concerns about a potential trade war eased by the afternoon after Trump’s top economic adviser Larry Kudlow said the administration was in a “negotiation” with China rather than a trade war.
Investors said they were comforted by the fact that any tariffs would not take effect immediately, if at all. Strategists also cited the S&P’s bounce above a key technical support level and said they expect equities to rise further around the first quarter earnings season, due to start in mid-April.
“We’re starting to feel that while markets hate uncertainty, Trump’s bark is worse than his bite when it comes to trade,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.
“It’s earnings that’s going to lift us off this bottom. It wouldn’t shock me if we chopped around sideways for a little bit before earnings season ... The trade stuff is really a side show. We’re waiting for real economic data like the jobs report Friday and for earnings. For now it’s going to be all about the technicals,” he said.
The S&P opened below its 200-day moving average, a key technical level, but inched above it as the session progressed, and by afternoon was in positive territory.
The Dow Jones Industrial Average .DJI rose 230.94 points, or 0.96 percent, to close at 24,264.30, the S&P 500 .SPX gained 30.24 points, or 1.16 percent, to 2,644.69 and the Nasdaq Composite .IXIC added 100.83 points, or 1.45 percent, to 7,042.11.
The turnaround marked the first time the S&P had showed gains for two consecutive days since early March.
Despite big swings in stocks, trading activity in U.S. equity options was muted as expectations for strong corporate earnings quelled the urge to load up on contracts that benefit from a surge in market volatility. The Cboe Volatility Index .VIX, the most widely followed barometer of expected near-term volatility for the S&P 500, closed down 1.04 points at 20.06.
The technology sector .SPLRCT rose 1.4 percent with only two of its stocks ending the day in negative territory including Facebook Inc (FB.O), which was pummeled after news its chief executive would testify in Congress over a data privacy scandal. It too closed well off its session low with a 0.6 percent drop to $155.10.
Boeing (BA.N) was the biggest drag on the Dow due to its exposure to China, and ended the day well off its session lows with a 1 percent decline to $327.44 after falling as low as $311.88.
Farm machinery company Deere & Co (DE.N) ended down 2.9 percent at $148.57 as it could be hurt by China tariffs if its customers’ exports are curbed.
After being a laggard for much of the session, the S&P 500’s industrials sector .SPLRCI turned positive late in the day to close 0.4 percent higher.
Advancing issues outnumbered declining ones on the NYSE by a 2.19-to-1 ratio; on Nasdaq, a 2.95-to-1 ratio favored advancers.
The S&P 500 posted one new 52-week high and eight new lows; the Nasdaq Composite recorded 40 new highs and 94 new lows.
Volume on U.S. exchanges was 7.04 billion shares, compared with the 7.3 billion average for the last 20 trading days.
Source: Netwealth Morning Business Roundup
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In other news - Liverpool thrash Man City in the Champions League Quarter Finals 3-0..
