Australia’s share market has handed back an early lead, as investors shrugged off easing oil prices and a strong lead from Wall Street.
The benchmark S&P/ASX200 index rose 10.3 points by midday on Friday to be up 0.12 per cent to 8,742.7, as the broader All Ordinaries gained 16.1 points, or 0.18 per cent, to 8,927.
The top-200 jumped almost 42 points at the open after a strong lead from the US overnight, but lacked follow-through as the morning progressed, with banking, retail and real estate assets taking a hit.
The index is on track for an ultimately flat five sessions in a row, after tumbling almost four per cent in the previous two weeks.
Mining stocks rebounded along with copper and gold prices, as oil prices eased on reports that recent Saudi oil supply disruptions would be limited.
With inflation and high fiscal debts pressuring global bond yields, low energy prices were vital to maintain flexibility for global central banks, Moomoo senior market strategist Tapas Strickland said.
“With shipping tensions around the Bab el-Mandeb chokepoint lingering, an underlying geopolitical risk premium remains embedded in energy markets,” he said.
“Limited refining capacity also continues to see elevated ‘crack’ spreads, meaning high diesel prices, regardless of the crude oil price.”
The Brent benchmark eased to $US103.50, its lowest price for the week, weighing on the energy sector with dips in Woodside, Santos, Ampol and Viva, while coal producers also sold off.
Dip-buyers piled into the raw materials sector, which bounced 1.1 per cent, tracking with decent leads from BHP and Rio Tinto.
Gold stocks were higher as the precious metal surged to $US4,346 ($A6,109) an ounce, sending the sub-index 3.5 per cent higher.
Financials, consumer stocks and real estate trusts were in the red, just over 10 days out from the Reserve Bank’s next monetary policy meeting with financial markets pricing in a four-in-five chance that it will hike the official cash rate to 4.6 per cent.
Appearing before a federal parliamentary economic committee on Friday, central bank governor Michele Bullock said she understood higher interest rates were tough for people with mortgages, but reducing inflation was essential.
“High inflation hurts all Australians and is especially tough on people with lower incomes and those in vulnerable financial positions,” she said.
In company news, UK retail group Frasers has extended its takeover bid for Accent Group to January 29. Accent owns Platypus, Hype DC, and Australia and NZ’s Athlete’s Foot stores.
The receiver for Cue Clothing will shut five unprofitable stores after the fashion brand entered voluntary administration earlier in the week.
The Australian dollar was buying 71.18 US cents, up slightly from Thursday at 5pm, when it traded at 71.17 US cents.
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