ASX stages big rally fueled by RBA-relief, closes 1.4% higher

Australian shares snapped a seven-day losing streak led by resource and financial stocks amid the US futures pointing to a rise as Wall Street looks to resume trade after a long weekend.

At the closing bell, the S&P/ASX 200 was 1.4 per cent or 90 points higher at 6,524.

The minutes from the Reserve Bank of Australia and the speech from governor Philip Lowe took the spotlight today. Investors learnt from Mr Lowe in his speech prior to the release of the meeting minutes on his view if he would follow the US Federal Reserve with a 75 basis-point hike next month. Mr Lowe said the board will be “having the same discussion” on the size as it did two weeks ago, prompting investors to interpret that a 75 basis-point hike is off the table for the July meeting.

Energy added 2.8 per cent, financials rose 2.7 per cent, consumer staples gained 1.9 per cent while materials closed higher by 1.6 per cent. Utilities have fallen for eight straight days.

The best-performing stock in the S&P/ASX 200 was PointsBet Holdings (ASX:PBH), closing 9 per cent higher at $2.78 and the worst-performing stock was Lake Resources (ASX:LKE), closing 28.4 per cent lower at $0.97.

The major banks rallied for a second day. National Australia Bank (ASX:NAB) added 3.8 per cent to $27.05, Westpac Banking Corporation (ASX:WBC) rose 2.7 per cent to $19.71, ANZ Banking Group (ASX:ANZ) gained 2.6 per cent to $21.95, Commonwealth Bank of Australia (ASX:CBA) added 2.4 per cent and Macquarie Group (ASX:MQG) closed 1.6 per cent higher at $164.

Queensland-based coal miners got hit after the QLD state government added an extra three tiers of coal royalties which include a royalty rate of 20 per cent for prices above $175 a tonne; 30 per cent for prices above $225 a tonne and 40 per cent for prices above $300 a tonne.

Bowen Coking Coal (ASX:BCB) sank 47 per cent to 21 cents and Coronado Coal (ASX:CRN) fell 7 per cent to $1.53.

However not all coal miners were weighed down by the news in Queensland. Across the Atlantic, Germany is set to limit its use of gas for electricity production and prioritise the filling of storage facilities to make up for a drop in Russian supply and increase the burning of coal.

Whitehaven Coal (ASX:WHC) rose 5.3 per cent to $4.78, Yancoal (ASX:YAL) added 4.4 per cent to $5.25 and New Hope (ASX:NHC) closed 2.2 per cent higher to $3.28.

Elsewhere, crude oil rose, gold slipped and Bitcoin is at US$21,000 as it continues to recover from its earlier retreat over the weekend.

Company news

ResApp’s (ASX:RAP) tool which aims to diagnose Covid-19 through the sound of a cough didn’t reach the sensitivity results from its pilot study in March this year. ResApp’s share price is lower because the data is below the minimum thresholds required for Pfizer’s reviewed take-over bid. As a result, the take-over price offered by Pfizer is set to be reduced to 14.6 cents from 20.7 cents. Shares closed 28.6 per cent to 12 cents.

Radiopharm Theranostics (ASX:RAD), a developer of products for cancer treatment has appointed Dr Susann Brady-Kalnay to the company’s scientific advisory board. Shares are trading flat at 14 cents. Shares closed flat at 14 cents.

Reece Pharmaceuticals (ASX:RCE), the developer of synthetic anti-infectives, has unveiled that its 327 candidate has a good safety and tolerability profile among 10 healthy male subjects. The phase 1 clinical trial on its sixth cohort was dosed at an 80-fold increase on the first cohort’s. Shares closed 16.8 per cent higher to 66 cents.

GrainCorp (ASX:GNC) has reaffirmed its 2022 guidance from its investor day today. Shares closed 5 per cent higher to $9.54.

Futures

The Dow Jones futures are pointing to a rise of 389 points.
The S&P 500 futures are pointing to a rise of 54 points.
The Nasdaq futures are pointing to a rise of 170 points.
The SPI futures are pointing to a rise of 72 points when the market next opens.

Asian markets

Japan’s Nikkei has gained 1.8 per cent.
Hong Kong’s Hang Seng has gained 1.2 per cent.
China’s Shanghai Composite has lost 0.8 per cent.

Commodities and the dollar

Gold is trading at US$1835.98 an ounce.
Iron ore is 8.0 per cent lower at US$112.35 a ton.
Iron ore futures are pointing to a fall of 1.8 per cent.
Light crude is trading $1.09 higher at US$109.86 a barrel.
One Australian dollar is buying 69.57 US cents.