- The ASX 200 traded 0.2% higher by the mid-session, paring opening gains.
- Seven of the 11 sectors traded higher, led by health care, A-REIT and telecom.
- Biopharmaceutical company Tissue Repair fell 38% at its market debut.
- Evolution Mining, Nufarm, Chalice Mining topped the ASX gainers’ chart.
- On Wall Street, all three major markets closed lower in overnight trade.
Australian shares staged a smart recovery by the afternoon trade on Thursday, supported by gains in health care, property and telecom stocks. However, losses in the energy space, owing to a fall in crude prices, and extended a fall in financial stocks amid rate hike fears, limited the market’s gains. There is fear in the market that central banks might be forced to raise interest rates earlier than expected to contain rising inflation. Meanwhile, investors cheered the easing of COVID-19 restrictions across Victoria as the state is set to hit the 90% double vaccination milestone this weekend. From tonight, there will be no longer density limits at hospitality venues, restrictions of home visits will be removed and no masks will be required in most settings.
What made ASX recover from the morning fall? || Top Movers of the day
By afternoon trade, the ASX 200 index was up by 14.40 points or 0.20% at 7,384.30. Earlier today, the benchmark index opened lower as overnight selling in global commodities is putting pressure on commodity stocks. The negative closing at Wall Street on concerns over interest rate hikes also dented market sentiment.
Top gainers and losers by mid-session
The biggest gainer on the ASX pack was gold miner Evolution Mining (ASX: EVN), which traded 8.7% higher by the mid-session. Some of the other top performers were seed technologies company Nufarm (ASX:NUF), gold producer Chalice Mining (ASX:CHN), software business Altium (ASX: ALU), and Kelsian Group (ASX: KLS), formerly known as SeaLink Travel Group.
On the losing side, mining infrastructure services provider Mineral Resources (ASX:MIN) was the worst performer with a 5% loss. Some of the other notable losers were gambling machine manufacturer Aristocrat Leisure (ASX:ALL), iron ore producer Champion Iron (ASX:CIA), real estate business Unibail-Rodamco-Westfield (ASX:URW), and coal miner Whitehaven Coal (ASX:WHC).
Tissue Repair nosedives 38% on IPO debut
On the initial public offering (IPO) front, Tissue Repair (ASX:TRP), a clinical-stage biopharmaceutical company, made a weak debut on the ASX today, with the share price falling as much as 38% by the mid-session. The company began trading on the ASX after successfully raising AU$22 million at an offer price of AU$1.15 a share in its IPO.
Health care and A-REIT support ASX
Back home, on the sectoral front, seven of the 11 sectors were trading higher. The health care sector was the best performer with a 1.5% gain, followed by a 1.2% rise in the A-REIT space. Consumer staples, telecom and information technology sectors also traded higher with modest gains.
On the flip side, the energy sector was the biggest loser with a 0.9% loss as crude oil prices fell sharply in overnight trade after OPEC and the International Energy Agency warned of impending oversupply. The rise in Europe's COVID-19 cases also threatens to derail the recovery in oil demand.
Meanwhile, the financial sector also extended a fall for the second day amid rising inflationary pressures.
Wall Street falls on inflation woes
On Wall Street, major US stocks ended lower in a lacklustre session on Wednesday as inflation concerns left investors jittery. The S&P 500 declined 0.26%, while the Dow Jones fell 0.58%. The NASDAQ Composite closed 0.33% lower.
The market is cooling off as the earnings season draws to a close and the focus shifted to monetary policy decisions amid rising inflation. Investors’ appetite for equities was dented by mixed macro data, which was impacted by high inflation, labour market troubles, and supply concerns. Traded fear that a further rise in inflation could hurt economic growth and prompt the US central bank to hike rates ahead of schedule.
Shares in news
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Shares of Sonic Healthcare (ASX: SHL) climbed nearly 4% after it released a trading update for the four months ended October 2021. The medical diagnostics company reported a 16% growth in earnings before interest, tax, depreciation and amortisation (EBITDA) to AU$991 million in the first four months of the 2022 financial year. The revenue rose 5% to AU$3.1 billion, compared to the same period a year ago.
Shares of software company Altium (ASX: ALU) rose nearly 3% after it reaffirmed an earnings guidance for the 2022 financial year. The company has committed to achieve 16-20% growth in revenue and an underlying EBITDA margin of 34-36%, Altium chairman Sam Weiss told investors at the company’s Annual General Meeting.
Shared of Evolution Mining (ASX: EVN) gained nearly 8% following an acquisition news. The share price hit a four-month high after the gold miner said it had inked a pact with Swiss giant Glencore to acquire a 100% stake in Ernest Henry Mining.
Australian intellectual property company IPH (ASX: IPH) traded 0.7% higher following updates on the Annual General Meeting (AGM). Speaking at the AGM, Managing Director Martin Cole said the company had recorded an increase in its earnings so far for the 2022 financial year compared to the prior period.
Shares of online luxury fashion marketplace Cettire (ASX: CTT) traded flat after signing a direct brand partnership. The company has inked a pact with international fashion group OTB Spa to directly integrate products from its licensed brand portfolio into Cettire’s platform.