Whipsaw start to 2022 sparks ASX 1.3% higher: Weekly up 0.1%

Market Reports

by Melissa Darmawan

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This week Australian shares swung to four-month highs to 16-month lows after markets jingled to close off 2021. The local bourse started 2022 whipsawed, sending energy shares soaring to technology names tanking amid fresh record highs of daily Omicron cases.

The storm was plagued by traders climbing the wall of worries triggered by December FOMC minutes. Investors questioned why markets reacted now and not back then swallowing the pill that the Fed plans to trim the balance sheet after an interest rate hike kicks-off.

This propelled treasury yields higher pushing bond prices lower as market participants priced in an interest rate hike in March, sparking a global tech rout as rotation into value stocks from growth stocks occurred after investors focused on strong fundamentals over distant earnings.

Lithium players also sparked the local bourse this week after Tesla posted record quarterly vehicle deliveries boosting optimism of the future of battery car ingredient miners.

But today, the local market roared, staging an impressive recovery with a broad-rally led by energy and financial stocks with miners also outperforming.

BHP (ASX:BHP) leapt 5.4 per cent higher, Rio Tinto (ASX:RIO) added 3.5 per cent, while Fortescue Metals (ASX:FMG) closed 6 per cent higher.

ANZ (ASX:ANZ) led the pack adding 3.2 per cent followed by Macquarie Group (ASX:MQG) added 3.1 per cent, Commonwealth Bank (ASX:CBA) rose 2.7 per cent, National Australia Bank (ASX:NAB) up 2 per cent, while Westpac (ASX:WBC) closed 1.9 per cent higher.

Santos (ASX:STO) and Beach Energy (ASX:BPT) both added 2.8 per cent closing at session highs while Woodside Petroleum (ASX:WPL) rose 2.2 per cent higher.

The comeback also saw private health insurers in the winners corner. Traders digested news on NSW’s introduction of new restrictions to combat the surge in Omicron with non-urgent, elective surgery suspended until February to alleviate the under pressure health system.

Medibank Private (ASX:MPL) was the best performer today with Nib Holdings (ASX:NHF) riding the coattails to take home bronze as the third top mover. Others in the pack included QBE Insurance (ASX:QBE) galloping 7.4 per cent to $12.19, Suncorp (ASX:SUN) rose 4.8 per cent to $11.07, while Insurance Australia Group (ASX:IAG) closed 4.7 per cent higher to $4.26.

The Australian dollar capped the week more than one per cent lower against the greenback following the hawkish tilt in the Federal Reserve policy meeting minutes.

Asian markets are mixed with the Japanese taking a cautious approach ahead of a long weekend, while Chinese stocks rose after a volatile week amid China’s securities regulator pledge to adopt measures to “firmly” prevent big market fluctuations.

Investors now look to Wall St for the much anticipated non-farm payrolls report after a string of labour force data points to a tighter jobs market. US shares are ready for an optimistic open as US futures point to a rise.

At the closing bell, the S&P/ASX 200 was 1.3 per cent or 95 points higher at 7,453. Over the week, it gained 0.1 per cent or 9 points.

Company news

The tussle continues for Priceline owner API (ASX:API) after Woolworths (ASX:WOW) scrapped its offer after completing its due diligence. API's financials didn't meet the retail giant's capital framework requirements after offering a deal of $1.75 a share. However, Wesfarmers (ASX:WES) is still in the picture with its deal of $1.55 per share with eyes this coming quarter on an outcome. Shares in Woolworths (ASX:WOW) closed 0.2 per cent lower at $37.36, Wesfarmers (ASX:WES) jumped 0.7 per cent at $58.46, while a selloff in Australian Pharmaceutical Industries (ASX:API) saw shares close 12.4 per cent lower at $1.51.

Elsewhere a few investment managers have unveiled some results. Shares in Magellan Financial Group (ASX:MFG) closed 5.4 per cent lower at $19.29 after capping off 2021 with $95.5 billion in funds under management (FUM). The global equities manager posted a 15 per cent fall in FUM from the September quarter after St James' Place pulled $23 billion, along with outflows from retail and institutional investors.

Shares in Pinnacle Investment (ASX:PNI) recovered from its 2.3 per cent fall at the open after reporting $18 million in performance fees for the second half of last year. The company expects $2 million in net return on investments slated for the first half of this year. Shares closed 1.2 per cent lower at $13.52.

Investors booked their profits after James Hardie (ASX:JHX) sacked chief executive Jack Truong effective immediately after employees raised concerns about his work-related interactions. Shares fell 4.1 per cent lower at $51.54. Harold Wiens has been appointed interim chief executive and Michael Hammes has been appointed to the role of executive chairman, while the search for a replacement is underway.

Futures

The Dow Jones futures are pointing to a rise of 69 points.
The S&P 500 futures are pointing to a rise of 9 points.
The Nasdaq futures are pointing to a rise of 16 points.
The SPI futures are pointing to a rise of 93 points when the market next opens.

Best and worst performers

All sectors closed higher with energy as the best performer powering up 2.2 per cent while consumer staples added 0.3 per cent with the fewest gains.

The best-performing stock in the S&P/ASX 200 was Medibank Private (ASX:MPL) surging 5.9 per cent higher at $3.60, followed by shares in Unibail-Rodamco-Westfield (ASX:URW), and NIB Holdings (ASX:NHF).

The worst-performing stock in the S&P/ASX 200 was Sims (ASX:SGM) sunk 6.3 per cent lower at $15.76, followed by shares in Novonix (ASX:NVX), and Magellan Financial Group (ASX:MFG).

Asian markets

Japan's Nikkei has lost 0.2 per cent.
Hong Kong's Hang Seng has gained 1.2 per cent.
China's Shanghai Composite has gained 0.2 per cent.

Wall Street

Over the last four trading days, the Dow Jones lost 0.3 per cent, the S&P 500 lost 1.5 per cent and the Nasdaq lost 3.7 per cent.

Commodities and the dollar

Gold is trading at US$1792.66 an ounce.
Iron ore is 2.7 per cent higher at US$120.91 a ton.
Iron ore futures are pointing to a rise of 0.4 per cent.
Light crude is trading $0.64 higher at US$80.10 a barrel.
One Australian dollar is buying 71.59 US cents.

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