Tech stocks lead Friday’s rally: ASX down 1.8% over the week

The Australian sharemarket closed lower for a fourth week despite a rally on Friday’s session thanks to information tech. Tech’s gains were much needed after yesterday’s 8.7 per cent dive as investors continued to sell out of long duration stocks ahead of a lift in interest rates to curtail inflation.

At the closing bell, the S&P/ASX 200 was 1.9 per cent or 134 points higher at 7,075. Over the week, it was 1.8 per cent or 131 points lower.

The local index had its best day in 3.5 months, amid the Nasdaq futures pointing to a 0.9 per cent rise. The rebound came after a predominantly red week, which saw investors struggle to shake off global recession fears.

Information tech led in a broad-based rally today, up 6.9 per cent, followed by property and healthcare, both up 3 per cent. Consumer staples added the least, up 0.8 per cent.

Afterpay owner Block (ASX:SQ2) led the tech space, soaring 15 per cent to $114.88 as the top performer, followed by Life 360 (ASX:360), up 13.4 per cent to $3.48 as second-best. Xero (ASX:XRO) also added 9.1 per cent to $83.93.

PolyNovo (ASX:PNV) led the healthcare space, up 12.7 per cent to $1.28 as the third-best stock, with Clinuvel Pharmaceuticals (ASX:CUV) up 10.2 per cent to $16.13 following its fourth strategy update.

The largest miner on the index, BHP Group (ASX:BHP), rose 2 per cent to $45.84. Fortescue Metals Group (ASX:FMG) added 2 per cent to $19.39 and Rio Tinto (ASX:RIO) closed 2.1 per cent higher at $105.59.

Santos (ASX:STO) led the energy circle, up 3.2 per cent to $8.05, followed by Woodside Petroleum (ASX:WPL), up 2.7 per cent to $30.40.

On the other hand, gold miners weighed. Newcrest Mining (ASX:NCM) was down 0.5 per cent to $24.58 and Evolution Mining (ASX:EVN) closed 0.6 per cent lower at $3.43.

Major banks were led by Macquarie Group (ASX:MQG), which jumped 4.5 per cent to $183.11, while Commonwealth Bank of Australia (ASX:CBA) shed the least, up 0.1 per cent to $102.28, with the rest up about 1 per cent each.

Here’s what Mel said about China’s lockdowns

In Asian markets, Beijing officials denied it was heading for lockdown as panic buying gripped the capital on Thursday. Rumours were sparked by latest tightening measures involving suspension of taxi services in some virus-hit districts. Officials denied rumours of a lockdown and told people not to panic-buy, but also encouraged residents to stay home and said they would launch a new round of mass testing across most of the city.

The news hasn’t weighed on the commodities complex yet, however uncertainties lie as to how long these extended measures will last. Despite what is happening in China, global markets are under supplied with analysts saying that the oil market will get tighter as China starts to ease its lockdowns. The world’s second largest economy is one of the largest consumers of commodities, buying around 70 per cent of global iron ore, almost half of the other base metals and consuming around 15 per of the world’s oil supply.

Local economic news

Western Australia is one of just two states to see an increase in new home sales in April, recording a significant increase in the amount of new activity from the same period prior to the Covid-19 pandemic, according to The Housing Industry Association.

Company news

Pro-Pac Packaging (ASX:PPG) cut its FY22 guidance due to supply chain disruptions, labour shortages and Covid-19. It now expects underlying profit after tax to be around $5 million. Shares tumbled 17.9 per cent to $1.10.

Software company Bigtincan (ASX:BTH) signed a partnership with Oracle to join the Oracle PartnerNetwork. Bigtincan said the program allows for new tech offerings on the Oracle Cloud and sales reps to view client information, as well as create custom presentations and send data to Oracle systems for updates. Shares rose 11.9 per cent to $0.58.

Primobius, a 50:50 joint venture between Neometals’ (ASX:NMT) and SMS Group, has executed a binding agreement with LICULAR, a subsidiary of Mercedes-Benz. Under the agreement, Primobius will supply equipment and engineering to a LICULAR Recycling Plant, for battery recycling and waste disposal, which is set to be located in Germany. Shares in Neometals’ (ASX:NMT) closed 12.6 per cent higher at $1.38.

Buru Energy (ASX:BRU) named Thomas Nador as its new chief executive officer, starting no later than September 1. Thomas is currently group executive, development at Beach Energy, based in Perth. Shares closed 6.3 per cent higher at $0.17.

Property giant Goodman Group (ASX:GMG) appointed New York-based leader Vanessa Liu as an independent director of Goodman, starting June 1.Vanessa is currently co-founder and chief executive officer of SaaS technology company Sugarwork, and an independent director of Appen (ASX:APX). Shares in Goodman Group (ASX:GMG) closed 3.9 per cent higher at $19.64.

Electro Optic Systems (ASX:EOS) was selected as the Commonwealth government furnished equipment provider for marine weapon stations. The government has indicated it may order 36 units of EOS’ remote weapon stations. Shares closed 1 per cent lower at $1.87.

What else was on watch?

Several broker moves, APA Group (ASX:APA) rated as new Underweight at Barrenjoey with a price target of $10.91, while shares closed 1.3 per cent higher at $11.25.

Liontown Resources (ASX:LTR) rated new Neutral at JPMorgan with a price target of $1.30, with shares up 3.9 per cent to $1.20, Monash IVF (ASX:MVF) cut to hold at Jefferies with a price target of $1.25, while shares closed 3.2 per cent lower at $1.06, and Tabcorp (ASX:TAH) raised to hold from sell at Morningstar, with shares up 3.5 per cent to $5.16.

Westpac (ASX:WBC) closed 0.9 per cent higher at $24.00 amid takeover talks in progress on its flagship platform BT Panorama, according to the Australian.

Macquarie Group (ASX:MQG) closed 4.5 per cent higher at $183.11 amid Canadian pension fund Ontario Teachers’ Pension Plan, inking a US$1 billion in a new offshore wind business launched by MacBank to develop global projects, according to Reuters.

Futures

The Dow Jones futures are pointing to a rise of 243 points.
The S&P 500 futures are pointing to a rise of 38 points.
The Nasdaq futures are pointing to a rise of 166 points.
The SPI futures are pointing to a rise of 139 points when the market next opens.

Best and worst performers

All sectors finished in the black. The best-performing sector was Information Technology, up almost 7 per cent. The sector with the fewest gains was Consumer Staples, up 0.8 per cent.

The best-performing stock in the S&P/ASX 200 was Block (ASX:SQ2), closing almost 15 per cent higher at $114.88. It was followed by shares in Life360 (ASX:360) and PolyNovo (ASX:PNV).

The worst-performing stock in the S&P/ASX 200 was IGO (ASX:IGO), closing 3.5 per cent lower at $10.54. It was followed by shares in Reece (ASX:REH) and Gold Road Resources (ASX:GOR).

Asian markets

Japan’s Nikkei has gained 2.6 per cent.
Hong Kong’s Hang Seng has gained 2.1 per cent.
China’s Shanghai Composite has gained 0.7 per cent.

Wall Street

Over the last four trading days, the Dow Jones lost 3.7 per cent, the S&P 500 lost 4.9 per cent and the Nasdaq lost 6.8 per cent.

Commodities and the dollar

Gold is trading at US$1826.36 an ounce.
Light crude is trading $1.01 higher at US$96.20 a barrel.
One Australian dollar is buying 68.86 US cents.
Iron ore is 4.5 per cent lower at US$127.55 a ton.
Iron ore futures are flat.