ASX edges higher despite oil price plunge

·3-min read

The Australian share market has finished slightly higher as gains by the big banks outweighed a drop by BHP and the energy sector.

The benchmark S&P/ASX200 index finished up 15.3 points, 0.23 per cent, to 6,621.6 on Wednesday, while the All Ordinaries closed up 21 points, or 0.31 per cent, at 6,807.8.

The market was "waiting for a lot of things", InvestSMART chief market strategist Evan Lucas told Ausbiz TV.

"It's not just what's going on with the (US) inflation data, which is going to be high" when it's released on Wednesday night AEST.

"I also think they're waiting to see what goes on with earnings season," Mr Lucas said.

US earnings season begins on Thursday night, Australia time, with JPMorgan and Morgan Stanley reporting followed by construction companies.

"The inflation story for me is actually how companies start to forward-guide, and what kind of inflation those kind of companies are feeling," Mr Lucas said.

The ASX's energy sector was the worst performer, falling 1.8 per cent after Brent crude prices tumbled overnight to a four-month low of $US98 on fears of a global recession and new COVID-19 lockdowns in China.

Woodside Energy fell 2.9 per cent to $30.10, Santos dropped 1.3 per cent to $6.88 and Beach Energy was down 1.2 per cent to $1.67.

But Qantas, which spends billions each year on fuel, rose 4.3 per cent to $4.42. Air New Zealand lifted 2.7 per cent to 57c.

Elsewhere in the energy sector, New Hope Corp and Whitehaven were closing in on the multi-year highs they hit some weeks back, rising 3.1 and 4.5 per cent as coal prices spiked.

In the financial sector, ANZ was down 1.2 per cent to $22.43 after confirming it was in talks with US private equity giant Kohlberg Kravis Roberts & Co to buy accounting software platform MYOB.

The Melbourne-based lender is set to pay $4.5 billion for MYOB in a deal that could materialise as soon as Thursday, the Australian Financial Review reported.

The other big banks recovered from their morning losses to finish higher. CBA and NAB both gained 1.1 per cent, to $94.63 and $28.45, while Westpac added 0.3 per cent to $20.16.

Macquarie advanced 2.2 per cent to a one-month high of $171.40.

In the heavyweight mining sector, BHP dropped for a third straight day, retreating 1.4 per cent to $36.92, while Rio Tinto was down by the same percentage to $94.10.

KMD Brands rose 0.5 per cent to $1.01 after the Kathmandu and Rip Curl owner reported that trading conditions had improved in the second half even as COVID-19 outbreaks caused sporadic store closures due to staff availability.

Same store sales were up 2.1 per cent at Rip Curl and 7.3 per cent at Kathmandu in the 49 weeks to July 10, KMD said.

The tech and consumer discretionary sectors were the best performing, both up 1.18 per cent.

Sezzle plunged another 21.6 per cent to a record low of 20c, which followed Tuesday's 38.6 per cent drop, as its merger with fellow buy now, pay later company Zip collapsed.

A year ago Sezzle shares were trading for $7.

The Australian dollar recovered slightly after hitting two-year low against its surging US counterpart. It was buying 67.66 US cents, from 67.20 US cents on Tuesday.

ON THE ASX:

* The benchmark S&P/ASX200 index closed on Wednesday up 15.3 points, or 0.23 per cent, at 6,621.6

* The broader All Ordinaries gained 21 points, or 0.31 per cent, to 6,807.8

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 67.20 US cents, from 67.20 US cents at Tuesday's close

* 92.81 Japanese yen, from 92.27 yen

* 67.39 Euro cents, from 67.15 cents

* 56.75 British pence, from 56.70 pence

* 110.38 NZ cents, from 110.20 cents

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