— Finance

ASX bounces back after steep plunge

After Monday’s steep slump, the ASX bounced back, recouping much of the losses amid warnings volatility could increase in the coming months. On Tuesday, the Australian share market jumped sharply to recoup most of the losses suffered in the previous session, in line with wild swings in overseas markets. The S&P/ASX200 closed 1.48 percent higher at 7342.2, while the All Ordinaries Index jumped 1.44 percent to 7592.7. That compares to a significant plunge of more than 1.8 percent on both indices on Monday. “After yesterday’s brutal selloff, the ASX 200 has bounced back strongly today with almost all sectors firmly in the green,” OMG chief executive Ivan Tchourilov said.

“The market’s still extremely temperamental, evident in yesterday’s price action. US stocks rose overnight, clawing back some of the previous week’s steep losses, as investors brushed aside concerns about a Federal Reserve official flagging interest rates may be hiked sooner than expected, Ord Minnett said. “We’ve recovered most of those losses today, which is a good sign, but also indicates volatility is starting to increase and may continue to make its presence felt in the coming months.” CommSec analyst James Tao said there had been “pretty wild swings” in global markets, and the Australian market was no different.

ASX bounces

Investors were trying to digest the commentary to get clues as to the trajectory for interest rate rises in coming years, as well as the “easing of monetary policy that we’ve seen due to Covid-19”, Mr. Tao said. He added that some of the best rebounds were in financials and resources on the local bourse. After slumping more than 5 percent on Monday, Commonwealth Bank put 2.21 percent to $100.23. ANZ appreciated 2.14 percent to $28.68, National Australia Bank added 1.17 percent to $26.73, Westpac strengthened 1.76 percent to $26.61, and Bank of Queensland rallied 5.47 percent to $9.26.

“There were certainly some concerns about Chinese demand for steel, which impacts demand for iron ore,” Mr. Tao said. Despite the iron ore price sinking about 5 percent overnight, Rio Tinto gained 1.62 percent to $121.99, BHP lifted 2.35 percent to $46.68, and Fortescue rose 2.6 percent to $22.38. Lithium miner Pilbara Minerals jumped 7.4 percent to $1.45, and diversified miner IGO Ltd leaped 6.22 percent to $7.52 after announcing all regulatory requirements to form a new lithium joint venture with China’s Tianqi had been satisfied.

Chief executive Peter Bradford said that the joint venture would initially focus on commissioning Train 1 at the Kwinana lithium hydroxide refinery south of Perth and work with partner Albemarle on expansion opportunities at the Greenbushes lithium mine. “Demand for high-quality spodumene and lithium hydroxide has increased significantly over recent months, promising strong returns to our shareholders as this trend, driven by global decarbonization and electric vehicle demand, continues,” he said.

Santos jumped 3.17 percent to $7.48 in the energy sector, and Woodside improved 2.5 percent to $23.34. Buy-now-pay-later provider Openpay soared 17.02 percent to $1.65 after announcing it will acquire Payment Assist, a leading BNPL provider to the UK automotive sector. “The stock has had a treacherous past few months with the share price down more than 50 percent since the high reached in February – and down more than 65 percent from all-time highs reached last year, so it’s had a lot of making up to do,” Mr. Tchourilov said.

“It’s a good result for shareholders today but is an increasingly tough space to be in unless you’re a well-established global player like Afterpay or Zip Co – which is the outcome Openpay is trying to achieve.” Afterpay put on 1.63 percent to $119.12, while Zip slipped 1.58 percent to $8.08. Medicinal cannabis business Little Green Pharma surged 10.77 percent to 72 cents after announcing the acquisition of a cultivation and production facility in Denmark. It also revealed firm commitments to raise about $27m from existing investors, including a $15m pledge from Gina Rinehart’s Hancock Prospecting, which will hold more than 10 percent of the company after the share placement.

Another strong performer was Redbubble, which prints graphics on-demand on items such as mugs and T-shirts, surging 6.75 percent to $3.48. Washington H Soul Pattinson unveiled a merger with Milton Corporation, with managing director Todd Barlow saying it would bring together “two of Australia’s great investment companies to create a $10 billion group with enhanced liquidity, diversification and access to a broad range of asset classes”. Shares in Washington H Soul Pattinson lifted 0.83 percent to $30.50, while Milton shares rocketed 16 percent to $5.80. The Aussie dollar fetched 75.13 US cents, 54.07 British pence, and 63.12 Euro cents in afternoon trade.

Gemma Broadhurst
I am a writer by profession, and I love to write in my spare time. I am one of the most experienced writer for newspriest. I always make sure that whatever is written on my blog is 100% genuine and true. I am a University of Florida graduate pursuing a Master's degree.

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