Australian Market Modestly Higher

The Australian stock market is modestly higher on Wednesday, recouping the losses in the previous session, with the benchmark S&P/ASX 200 staying just below the 7,200 level, despite the broadly positive cues overnight from Wall Street, with technology stocks rebounding strongly as traders keep reassessing the geopolitical risks amid escalating tensions between Russia and Ukraine.

Traders also reacted to some positive data released on domestic wage price index and construction work for the fourth quarter.

Concerns over the domestic COVID-19 cases have also softened despite a recent spike in cases in some areas. Some states have now moved to essentially no COVID related restrictions and no masks.

The benchmark S&P/ASX 200 Index is gaining 33.80 points or 0.47 percent to 7,195.10, after touching a high of 7,197.60 earlier. The broader All Ordinaries Index is up 40.90 points or 0.55 percent to 7,463.10. Australian stocks ended significantly lower on Tuesday.

Among major miners, Rio Tinto and OZ Minerals are gaining more than 1 percent each, while BHP Group is adding almost 1 percent and Fortescue Metals is edging up 0.5 percent. Mineral Resources is rising more than 2 percent.

Oil stocks are lower. Origin Energy and Santos are edging down 0.5 percent each, while Woodside Petroleum is losing more than 1 percent and Beach energy is down almost 1 percent.

In the tech space, Appen is surging more than 5 percent, Xero is edging up 0.5 percent, Block is advancing almost 3 percent and Zip is soaring more than 7 percent. WiseTech Global is gaining almost 1 percent after it recorded a 75 per cent jump in first-half operating profit and declared an interim dividend.

Among the big four banks, Commonwealth Bank is gaining almost 1 percent, while ANZ Banking and National Australia Bank are losing almost 1 percent each. Westpac is flat.

Among gold miners, Resolute Mining and Northern Star Resources are down more than 1 percent each, while Evolution Mining and Newcrest Mining are slipping more than 3 percent each. Gold Road Resources is losing more than 2 percent.

In other news, shares in Woolworths Group are adding almost 2 percent after the supermarket operator reported beter than expected first-half profit and forecast improved financial performance in the second half. However, it cut interim dividend.

In economic news, the wage price index in Australia was up a seasonally adjusted 0.7 percent on quarter in the fourth quarter of 2021, the Australian Bureau of Statistics said on Wednesday – up from 0.6 percent in the previous three months and in line with expectations. On a yearly basis, wages were up 2.3 percent – accelerating from 2.2 percent in Q3 but missing forecasts for 2.4 percent.

The value of construction work done in Australia was also up a seasonally adjusted 2.9 percent on quarter in the fourth quarter of 2021, the Australian Bureau of Statistics said on Wednesday – coming in at A$53.463 billion. That beat expectations for an increase of 2.5 percent following the 0.3 percent contraction in the three months prior.

In the currency market, the Aussie dollar is trading at $0.723 on Wednesday.

On Wall Street, stocks moved sharply lower during trading on Tuesday reflecting worries about escalating tensions between Russia and Ukraine. The major averages extended the steep drop seen to close out the previous week, with the Dow tumbling to an eight-month closing low.

The major averages fluctuated in the latter part of the session but closed firmly in negative territory. The Dow plunged 482.57 points or 1.4 percent to 33,596.61, the Nasdaq slumped 166.55 points or 1.2 percent to 13,381.52 and the S&P 500 slid 44.11 points or 1 percent to 4,304.76.

Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index inched up by 0.1 percent, the French CAC 40 Index closed just below the unchanged line and the German DAX Index fell by 0.3 percent.

Crude oil prices moved up sharply Tuesday on concerns over supplies following Russia’s aggressive move into Ukraine. It is feared that a full-blown conflict in Ukraine could cause major disruption to crude supplies. West Texas Intermediate Crude oil futures for April ended higher by $1.70 or 1.9 percent at $91.91 a barrel.

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