Resources rally lifts ASX to close 0.5% higher

The Australian sharemarket rose for a 2nd day wiping out the losses from this week, as resources stocks rallied supported by stronger commodity prices. The strong lead from Wall St followed a highly anticipated outcome on the US’ state of inflation, which showed that consumer prices rose to seven per cent from the year to December 2021, it’s highest in four decades.

The outcome was shrugged off by market participants as the data was in-line with expectations, and not enough to spur any meaningful trading after concluding that the seven handle didn’t warrant the Fed to be more hawkish.

Meanwhile, the demand for the steel-making ingredient continues as the world’s largest iron ore exporter, Brazil experiences torrential rainfall disrupting mining operations. Despite the Winter Olympics in February and China’s aim to curb carbon emissions prior, the rise in steel mill margins and the recovery in Chinese steel production from December 2021 has contributed to the strength of the iron ore price according to S&P Global Platts.

This has helped our heavyweight miners with Rio Tinto (ASX:RIO) up 4.1 per cent to $111.70, BHP (ASX:BHP) added 3.8 per cent to $46.85, while Fortescue Metals (ASX:FMG) gained 2.5 per cent to $21.40. South32 (ASX:S32) closed 3.7 per cent higher to $4.24.

Energy stocks rallied after the Energy Information Administration posted a stockpile shortage amid OPEC+ and its quota widening, as economies remain open omid the havoc of Omicron. Woodside (ASX:WPL) rose 2.3 per cent to $24.90, Santos (ASX:STO) gained 1.6 per cent to $7.09, while Beach Energy (ASX:BPT) closed 2.2 per cent higher to $1.41.

Nickel and copper miners also took the spotlight as the base metal prices rallied. The nickel price hit its highest level in a decade by 1.1 per cent, this supported IGO (ASX:IGO) up 3.8 per cent to $12.45, Chalice Mining (ASX:CHN) added 3.6 per cent to $8.72, while Nickel Mines rallied again (ASX:NIC) closed 5.2 per cent higher to $1.63 coming in as the second best performer.

The company that took the lead for the session was Crown (ASX:CWN) adding 8.8 per cent to $12.65 after US private equity giant Blackstone increased its takeover bid by 60 cents to $13.10 valuing the offer at $8.9 billion. The new deal is subject to Blackstone completing due diligence, with the interim offer already having approval from Crown’s board. The sweetened proposal comes after the embattled casino operator was investigated into organised crime by the royal commission, with the share price at $8.60 half a year ago.

Elsewhere, artificial intelligence company Brainchip Holdings (ASX:BRN) soared 17.7 per cent to $1.40, two days after the ASX slapped a speeding ticket.

Information technology was one of the losing sectors with Afterpay (ASX:APT) giving up gains, falling 1.3 per cent to $75.99 after its 5 per cent jump on Wednesday. The buy-now pay-later darling after receiving approval from the Bank of Spain for its takeover by US tech giant Block.

Across the banks, ANZ (ASX:ANZ) rose 1.3 per cent to $28.40, National Australia Bank (ASX:NAB) added 1.1 per cent to $29.57, Commonwealth Bank (ASX:CBA) added 0.5 per cent to $102.20 while Westpac closed 0.3 per cent higher to $21.73.

Investors now look to further inflation numbers in the US, on the producer side of things, the weekly jobless claims data is also due while Fed Governor Lael Brainard appears before the US Senate.

At the closing bell, the S&P/ASX 200 was 0.5 per cent or 36 points higher at 7,474.

Futures

The Dow Jones futures are pointing to a fall of 29 points.
The S&P 500 futures are pointing to a fall of 6 points.
The Nasdaq futures are pointing to a fall of 36 points.
The SPI futures are pointing to a rise of 27 points when the market next opens.

Best and worst performers

The best-performing sector was Materials, up 2.6 per cent. The worst-performing sector was Health Care, down 1.2 per cent.

The best-performing stock in the S&P/ASX 200 was Crown Resorts (ASX:CWN), closing 8.8 per cent higher at $12.65. It was followed by shares in Nickel Mines (ASX:NIC) and Champion
Iron (ASX:CIA).

The worst-performing stock in the S&P/ASX 200 was PolyNovo (ASX:PNV), closing 10.1 per cent lower at $1.65. It was followed by shares in PointsBet Holdings (ASX:PBH) and Sonic Healthcare (ASX:SHL).

Asian markets

Japan’s Nikkei has lost 0.8 per cent.
Hong Kong’s Hang Seng has gained 0.2 per cent.
China’s Shanghai Composite has lost 0.3 per cent.

Commodities and the dollar

Gold is trading at US$1827.43 an ounce.
Iron ore is 2.3 per cent higher at US$131.60 a ton.
Iron ore futures are pointing to a rise of 1.02 per cent.
Light crude is trading $0.26 lower at US$81.76 a barrel.
One Australian dollar is buying 72.92 US cents.