A lithium-led mining rally kept the ASX on track for this year’s highs.
The S&P/ASX 200 climbed 22 points or 0.3 percent by mid-session. The advance lifted the index briefly to within 100 points of this year’s peak.
Lithium miners Liontown Resources and Allkem hit records. Asset manager Pendal Group surged after rival Perpetual pitched a $2.4 billion takeover offer.
What’s driving the market
A four-week rally got back on track after a brief wobble at the end of last week. The ASX 200 reversed two days of modest losses across the month-end, resuming an advance that has lifted the index more than 500 points since March 8.
US and European markets edged higher at the end of last week. TheS&P 500hit a session high in the closing minutes, up 0.34 percent after trading both sides of break-even. The pan-European Stoxx 600 shrugged off a record inflation report, rising 0.54 percent.
Mining stocks led today’s Australian advance. The materials sector climbed 0.8 percent to a new high following gains in iron ore, nickel and zinc.
Takeover action encouraged buyers ahead of tomorrow’s Reserve Bank policy meeting. Pendal Group jumped 20.2 percent to $5.38 following a conditional, non-binding indicative offer from Perpetual to buy the company for $2.4 billion in cash and scrip. Perpetual shares dropped 6.47 percent.
TheReserve Bank meets tomorrow under pressure to respond to increases in the cost of living and moves by other central banks to increase rates. While the RBA is expected to leave the cash rate at a record low, central bank-watchers expect an indication rate hikes are likely this year.
“Given the data continues to outpace their forecasts with the unemployment rate already at 4% and set to head sub-4% next month, a greater nod to balancing risks in the post-meeting statement would put guidance on a more agile setting, which we think is needed given Q1 CPI is likely to surprise the RBA,” NAB currency strategist Rodrigo Catril said.
Going up
Lithium was last week’s hottest sub-sector and continued to shine this morning. Liontown Resources climbed 9.51 percent, Allkem 7.26 percent and Pilbara Minerals 5.39 percent.
Mineral sands miner Iluka Resources rallied 3.99 percent after greenlighting a rare earths refinery in WA. Gold miner De Grey jumped 7.72 percent.
A surge in spot iron ore prices towards US$160 a tonne helped BHP and Rio Tinto inch nearer last year’s highs. BHP gained 0.1 percent, Rio Tinto 0.04 percent and Fortescue Metals 2.97 percent.
Other heavyweights to advance included Newcrest +1.37 percent, Woodside +1.22 percent and CSL +0.8 percent.
Troubled fund manager Magellan caught a lift from takeover interest in Pendal, rising 8.66 percent.
A double shot of positive news lifted Telix Pharmaceuticals 6.32 percent. The biotech announced its lead product, a prostate cancer imaging agent, was on sale in the US for the first time. The company was also part of a project that secured $23 million in federal funding.
Insurance broker AUB Group rose 1.73 percent after confirming media reports it is interested in London-based wholesale insurance broker Tysers. The company said it had been in contact with Tysers’ owner but discussions had not led to a transaction acceptable to all parties.
Going down
Consumer stocks were the biggest drag ahead of tomorrow’s RBA policy update. At the top end, Aristocrat Leisure declined 2.63 percent, Woolworths 0.59 percent and Wesfarmers 0.26 percent. Breville Group shed 1.79 percent, Corporate Travel Management 1.98 percent and Webjet 1.62 percent.
Last week’s best performer, Tempest Minerals, dived 33.33 percent after updating the market on drilling at the promising Meleya Project.
Air New Zealandsank 19.57 percent as trade resumed after an NZ$2.2 billion recapitalisation project raised funds at a significant discount to the last share price.
Other markets
In Asia,a mixed morning saw the Asia Dow add 0.32 percent and Hong Kong’s Hang Seng 0.94 percent. Japan’s Nikkei dipped 0.08 percent. Trade in China was suspended for a public holiday.
US futures softened over the weekend. S&P 500 futures fell six points or 0.14 percent.
Oil added to last week’s losses. Brent crude retreated 53 US cents or 0.5 per cent to US$103.84 a barrel.
Gold was almost unchanged, ahead ten US cents or 0.01 percent at US$1923.80, an ounce.
The dollar climbed 0.31 percent to 75.06 US cents.