ASX inches higher after choppy session

Volatility continued to prevail on the Australian sharemarket, with banks and the resources sector the mainstays during a choppy session.

The benchmark S&P/ASX200 index closed just 16 points or 0.22 per cent firmer at 7241.2, while the All Ordinaries Index inched 7.5 points higher to 7543.6.

CommSec analyst Tom Piotrowski said Wall Street had a “spirited recovery” overnight following a sell-off during the previous session.

The local market picked up on that, but the strength was fleeting, he said.

OMG chief executive Ivan Tchourilov said the market managing to open higher early was a break to the recent trend and while it couldn’t be sustained, the local bourse finished marginally ahead of last night’s close.

“The bounce-back wasn’t as strong as what we saw in the US, so we will look to see how their market performs overnight for more direction early next week,” he said.

Mr Piotrowski said the theme of the week had been volatility.

“At its best levels, the ASX200 was up 0.8 per cent in opening trade and then it turned tail quite quickly.”

He said the downtrend was sparked by a sell-off of US futures in after hours trade.

Banks and the resources sector proved the mainstay, while individual corporate performances made the difference, Mr Piotrowski said.

ANZ added 1.27 per cent to $27.03, Commonwealth Bank improved 0.74 per cent to $96.61, National Australia Bank gained 1.3 per cent to $27.96 and Westpac lifted 1.17 per cent to $20.70.

BHP announced late on Thursday its board had given the go-ahead to plans to de-list from the London Stock Exchange and unify its corporate structure under its existing Australian parent company.

“The board approval was expected and we believe that BHP is confident in securing the required 75 per cent threshold on the shareholder votes,” RBC Europe’s Tyler Broda said.

BHP improved 1.3 per cent to $40.23, Rio Tinto gained 1.4 per cent to $95.52, South32 added 1.08 per cent to $3.75 and Nickel Mines rose 2.18 per cent to $1.40 but Fortescue declined 0.87 per cent to $17.10.

OZ Minerals firmed 0.73 per cent to $26.41 after announcing it had reached a milestone in its Carrapateena block cave expansion.

Pilbara Minerals dropped 3.54 per cent to $2.45 and fellow lithium miner Orocobre declined 2.96 per cent to $9.18.

That comes amid reports the frontrunner candidate for Chile’s next president, Gabriel Boric, had been talking up his plan for a state lithium firm but would not repeat the nation’s “historic error” of privatising its resources.

Oil prices rose after OPEC+ adhered to its policy of incrementally increasing output and on news Omicron might not be as significant as first thought, Mr Tchourilov said.

“Crude and US oil have been exceptionally volatile in recent weeks: inflation led to a price spike not long ago while Omicron fears threw futures back into bear territory,” he said.

“Keep in mind the full Omicron picture is yet to be seen and new information has the potential to disrupt markets further.”

Oil Search gained 2.6 per cent to $3.94, Santos appreciated 1.6 per cent to $6.36 and Woodside Petroleum added 1.14 per cent to $21.34, while Beach Energy rose 0.86 per cent to $1.17.

Biotech giant CSL dropped 2.5 per cent to $297.67.

“It’s been reported in the press that you’ve got CSL considering a takeover of Vifor, a Swiss company, and that has seen local shares up by about 18 per cent in Swiss trade overnight,” Mr Piotrowski said.

“It’s reported to be an $8.6bn transaction and the commentary out of CSL so far has been they often consider strategic targets – that usual corporate speak.”

CSL described the reports as “speculation”.

“There is no certainty that any transaction will result from CSL’s consideration of such opportunities and, if any transaction does result, when such a transaction would occur,” the market heavyweight said.

Pharmacy owner Washington H Soul Pattinson, which owns a slab of Woolworths and Wesfarmers takeover target Australian Pharmaceutical Industries, was the second top performing stock in the ASX200, rising 3.34 per cent to $32.16.

Medical imaging technology company Pro Medicus was the top performing stock in the index, up 3.79 per cent at $57.78.

TPG Telecom slumped 8.6 per cent to $6.05 after reports founding chief executive David Teoh had inked a deal to sell a chunk of the company’s shares, worth about $335m, in a block trade.

The telco responded by saying he and associates had an escrow agreement under which they must not sell more than 20 per cent of their aggregate shareholding for 24 months from mid-July 2020.

Premier Investments, which owns brands including Just Jeans, Peter Alexander and Smiggle, put on 2.77 per cent to $30.81 after a trading update on Thursday went down favourably.

The retail giant’s shares had been under pressure in recent weeks, Mr Piotrowski noted.

Corporate Travel Management was another such example, up 3.09 per cent at $22.36.

Metal detection and communications firm Codan fell 4.7 per cent to $9.32, two days after announcing it had bought UK-based Broadcast Wireless Systems and continuing its share price tumble from more than $19 mid-year.

Industrial testing company ALS Ltd advanced 2.85 per cent to $12.65.

The Aussie dollar was buying 70.79 US cents, 53.22 British pence and 62.63 Euro cents in afternoon trade.