The ASX followed through on its promise of an up day, with the S&P/ASX200 gaining 74.70 points or 1.04% to 7,281.60.
Over the last five days, the index is virtually unchanged, but is down 2.19% for the last year to date.
The top performing stocks in this index for the day were Liontown Resources (ASX:LTR) Limited up 17.63% (after its Tesla supply agreement) and Imugene Ltd (ASX:IMU, OTC:IUGNF) up 11.82%.
Nine of the 11 sectors were in the green led by health, up 5.7% during the day on the back of Imugene’s rise and CSL Limited (ASX:CSL) which was 8.42% higher at close on the back of an upgrade of earnings guidance in its interim report.
Real Estate also performed well gaining 2.7%, led by Vicinity Centres up 11.13% after returning to profit in the first half as it recovers from the pandemic.
Treasury Wine Estates Ltd was 1.4% higher, driving up consumer staples, despite its profit losses. However, it did report growth in key markets as it seeks to rebound from the China crisis.
Energy lagged down 1.3%, while materials lost 0.8% during the day are the weakest industries following a drop in iron ore and crude oil prices.
Santos Ltd (ASX:STO) led the decline down 3.2% at one stage, despite first half profits tripling. It finished down 2.57%.
Newcrest Mining lost 11.2%, but recovered to be down 0.30% at close, while Hub24 Ltd dropped 7.7% and EML Payments Ltd lost 3.31% by close.
Energy prices to stay high
Oil and gas prices will remain high for weeks and months to come as the world grapples with the tension being played out between Russia and the Ukraine as well as China and Taiwan.
Those tensions have caused a supply squeeze which Santos chief executive Kevin Gallagher predicts will remain for some time.
Currently, Crude is nearing $US100 a barrel while Asia LNG prices are trading five times higher than a few years ago at $US25 per million British thermal units.
Prices are good for Santos, but not for consumers as they battle higher living costs.
“Ultimately the midterm, up to five years, I think we're seeing stronger prices and that is structurally driven,” Gallagher says.
“Right now, I'm not sure if this is the right price. I think you’ve seen the Ukraine political situation and some tension about China, Taiwan. All of those things are just adding to a sense of unease and market concern, which is maybe inflating the price a little bit, as undoubtedly there is very little sort of headroom or slack between the supply and the demand at this point in time.
“I just don't see big chunks of supply coming to the market to arrest that in the short term so I think we'll see stronger prices for a bit longer, but I would never bet on it and I would never count on it.”
Lower infection rate could temper inflation
COVID-19 cases continue to fall, leading some analysts to believe this could have a positive effect on inflation in the near term.
“As infections go down, economies can resume normal functioning, employees can return to work, supply chains can un-kink and spending can rotate towards services and away from goods,” Kristina Hooper, chief global market strategist for Invesco, a US fund manager, said.
“Falling COVID-19 cases represent a bright spot” and are “one factor that could help ease many of the inflationary pressures facing the global economy”, she said.
On the small cap front
- Great Boulder Resources Ltd finished 11.11% higher.
- AVZ Minerals Ltd finished 10.96% higher.
- Blue Star Helium Ltd finished 8.00% higher.
- Ioneer Ltd finished 7.89% higher.
- Jindalee Resources Limited finished 4.90% higher.
- Galena Mining Ltd finished 4.88% higher.
- Azure Minerals Limited finished 2.53% higher.
- Matador Mining Ltd finished 2.37% higher.
- Nova Minerals Ltd finished 1.73% higher.