Market wrap: ASX ends losing streak with positive May 31 trading day

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The Australian share market survived a gloomy night on Wall Street unscathed, ending a three-day losing streak and ending the week with a recovery.

The benchmark ASX 200 index rose 73.5 points, or almost 1 percent, to close at 7,701.7, while the broader All Ordinaries index rose 74.9 points, or 0.95 percent, to 7,970.8.

Technology stocks also rose by 25.6 points or 0.84 percent to 3,075.

The upturn was broad-based: 10 out of 11 industrial sectors closed in positive territory, led by staples with a strong increase of 1.91 percent and the energy sector with a jump of 1.77 percent.

Retail giants Woolworths and Coles rose two percent to $31.60 a share and 1.73 percent to $16.42 a share respectively, while poultry producer Inghams rose two percent to $3.54.

Oil and gas giant Woodside Energy rebounded from Thursday’s sell-off by 2 percent to close at $27.70 a share, while Santos rose 1.87 percent to $7.63.

The positive trading day ended a three-day losing streak and bucked a gloomy session on Wall Street overnight that saw the Dow Jones plunge 330 points, or 0.86 percent, to 38,111.

The S&P 500 lost 0.6 percent to 5,235, while the technology-heavy Nasdaq fell 1.08 percent to 16,737.

The problems on Wall Street came despite a downward revision to US GDP figures, which IG market analyst Tony Sycamore said would normally trigger a “huge rally” in equity markets on hopes of a rate cut by the US Federal Reserve.

“I think the ‘bad news is good news’ strategy didn’t work last night for two reasons,” he said.

“First, following the positive surprises in the Australian and German inflation reports earlier this week, the market is taking a more cautious approach to this evening’s European and US consumer spending inflation data.

“The second reason is due to the rebalancing of flows at the end of the month.

“When markets outperform, as was the case with the Nasdaq, fund managers are forced to sell the outperformers to return to the weighting of the benchmark portfolios.”

Mr Sycamore said the resilience of Australian share markets on Friday may have been due to a “buy the loser” strategy, given the relatively poor performance of the ASX200 in May compared to Wall Street.

Since the beginning of the month, the Nasdaq has risen by about 6.3 percent and the S&P 500 by about 4 percent.

The ASX200, on the other hand, is flat.

Mining giants BHP and Rio Tinto posted gains, rising 0.47 percent to $44.51 and 1.02 percent to $128.96, respectively.

But Fortescue continued its negative week, losing 0.16 percent to close at $24.74 despite a rise in late afternoon trading.

Major banks posted gains, led by Commonwealth Bank, which rose 1.31 percent to $119.54.

NAB rose 0.89 percent to $33.91, ANZ gained 1.15 percent to $28.25 and Westpac gained 0.19 percent to $25.98.

In corporate news, Australian fast-food chain Guzman y Gomez has announced that it will list on the ASX in June.

The Mexican restaurant and takeaway company will sell 11.1 million shares at $22 a share, giving it a valuation of $2.2 billion.

Qantas has signed a contract with Perth Airport that will see the airline’s operations relocated to a new $3 billion terminal by 2031.

The company’s shares rose 1.32 percent in late trading, closing at $6.15.

The biggest winner on the ASX200 was Telix Pharmaceuticals, whose shares rose 15.3 percent to $18.15 on positive data from a cancer drug trial.

The biggest laggard was Megaport Limited, whose shares fell 3.41 percent to $13.56.

The dollar rose 0.08 percent against the greenback and closed at 66.3 US cents.

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