ASX rallies after 10-month low

Volatility continued to reign on the Australian sharemarket, which jumped sharply after plunging to a 10-month low in the prior session, sinking officially into “correction” mode.

The benchmark S&P/ASX200 index rallied 2.19 per cent to 6988.1 while the All Ordinaries Index surged 2.13 per cent to 7266.3.

CommSec market analyst Steven Daghlian said it had been messy trade on both the local bourse and overnight on Wall Street, which fell, with tech stocks diving.

The ASX advance came after four straight days of losses.

“This is the type of volatility that we’ll probably need to get used to in markets at least for the time being … interest rates are likely to rise this year,” Mr Daghlian said.

“We could see a rate hike in the US as early as March and in Australia, we could see a rate hike around the middle of the year — that’s what markets are expecting.

“The last time rates were hiked in Australia was back in 2010 and it has also been since 2018 when we had rate hikes in the US.”

Every single sector on the ASX was in the green on Friday, led by consumer discretionary stocks.

Dusk Group soared 17.37 per cent to $2.77, Adore Beauty Group rocketed 11.11 per cent to $3.10 — well ahead of its $2.79 price target by UBS — Best and Less jumped 6.77 per cent to $3.47 while Myer leapt 13.33 per cent to 42.5 cents.

Lark Distilling advanced 9.07 per cent to $4.45 after releasing its first half trading update showing a 78 per cent rise in net sales.

Ord Minnett said the result was pleasing, noting Lark’s search for a new chief operating officer to spearhead the company’s export sales strategy to China, South East Asia, US and Middle East.

In the consumer staples sector, Woolworths added 3.53 per cent to $34.89, Coles gained 5.02 per cent to $16.53 and Metcash lifted 2.56 per cent to $4.

Healthcare stock ResMed eased 0.48 per cent to $31.25 after issuing its second quarter results, with revenues in line with Ord Minnett’s forecasts but missing consensus by about 3 per cent.

Imugene soared 10.53 per cent to 31.5 cents after inking a deal with Roche and being granted a patent in Europe, making it the best performing stock in the ASX200.

In the tech sector, Afterpay acquirer Block dipped 0.97 per cent to $149.27 after also falling on Wall Street amid reports a move by Apple in the payments space could affect the company.

Zip rose 1.38 per cent to $2.94 while Xero put on 4.94 per cent to $109.86.

Gold miner Newcrest dropped 6.36 per cent to $21.50 after releasing its December quarter report, which Macquarie Research described as soft.

Macquarie said gold and copper production was nine per cent and 19 per cent lower than it had forecast while all-in sustaining costs were 7 per cent higher than its estimate.

“However, Newcrest has reiterated its FY22 guidance for all assets suggesting the variance to our forecasts was within tolerance levels,” it said.

Rio Tinto gained 4.09 per cent to $113.76, BHP rose 2.74 per cent to $46.92 and Fortescue inched three cents lower to $19.45.

In a report entitled “Scraping the Bottom of the Barrel”, ANZ Research said crude oil prices rallied sharply as market fears of another Covid-induced hit to demand failed to materialise.

“Supply side constraints then sustained the rally,” it said.

“We see the market remaining in deficit in Q1 2022.”

Woodside found 0.45 per cent to $24.84 and Santos added 1.01 per cent to $7.03.

ANZ gained 1.48 per cent to $27.47, Commonwealth Bank improved 2.02 per cent to $95.67, National Australia Bank lifted 1.47 per cent to $27.65 and Westpac put on 2.33 per cent to $20.63.

The Aussie dollar was fetching 70.26 US cents, 52.41 British pence and 63.01 Euro cents in afternoon trade.