Major miners led the market gains as base metal and iron ore prices climbed. BHP Group rose 0.8 per cent to $37.16, Rio Tinto climbed 1 per cent to $91.77, South32 advanced 0.8 per cent to $3.85 and Fortescue Metals Group closed 0.5 per cent higher at $6.56.
The smaller miners were among the market’s best performers. Syrah Resources rose 8.5 per cent to $1.15, Lynas Corp climbed 7 per cent to $1.69 and Orocobre closed at $3.39, up 3.4 per cent.
The energy sector was also stronger after the US Energy Information Administration reported an unexpected fall in oil production. Woodside Petroleum climbed 1.4 per cent to $34.99, Oil Search rose 1.9 per cent to $8.00, Santos closed 1.9 per cent higher at $6.98, WorleyParsons advanced 3.4 per cent to $14.65 and Beach Energy ended the session at $2.08, up 3.5 per cent.
Kogan.com shares advanced 8.1 per cent to $3.86 on Thursday after it announced the launch of Kogan Marketplace. The platform allows retailers to sell their products directly through the Kogan.com website and is set to rival Amazon’s Marketplace, which is responsible for 50 per cent of the company’s revenue.
Commonwealth Bank closed 0.2 per cent lower at $72.93. The bank scrapped its plans to spin off its wealth management arm, with the entity too small to achieve the necessary scale. CBA had announced plans to demerge the wealth business last year, with many expecting the Hayne royal commission’s final report would recommend ending vertical integration.
Citi maintained its recommendation on Domino’s Pizza Enterprises saying while the parliamentary inquiry into the Franchising Code of Conduct was likely to place pressure on earnings for franchisors, it could gift Domino’s a greater market share in pizza. “Domino’s has 43 per cent share of the takeaway pizza market in Australia,” said analyst Craig Woolford. “Other franchisors may exit the market if the cost of compliance rises too far.” While the broker noted that compliance and administrations costs were likely to rise and the talent pool of franchisors set to shrink, they noted Domino’s recent store openings have come from existing franchisees and added they expected that trend to continue. Citi maintained its target price of $45.60 on Domino’s Pizza Enterprises, at a 10.5 per cent premium to its Wednesday close price.
What moved the market
Despite the British Parliament voting against leaving the European Union without a deal, the situation still cannot be ruled out entirely, with the vote not binding by law. If another deal cannot be reached by March 29, the UK would still leave the EU without a deal. Although the result is unlikely, it cannot be ruled out entirely with Theresa May’s latest deal failing to muster anywhere enough support from MPs earlier in the week. The most likely result from here is Britain requesting an extension of the scheduled March 29 departure date, however the 27 EU members would have to agree to the extension and it remains unclear just how long the extension would be.
The price of oil rose on Wednesday after the US Energy Information Administration reported an unexpected drop in US crude inventories. The price of West Texas Intermediate crude rose 2.4 per cent to $US58.26 a barrel. The EIA’s latest Short-Term Energy Outlook also revised down output estimates, its first downward revision in six months. The previous report said it expected US crude production to average 12.41 million barrels per day but the administration is now expecting an average of 12.3 barrels per day, a 0.9 per cent reduction in its forecast. US crude oil production was slightly lower in February from January, falling to 11.9 million barrels per day.
The euro has rebounded from a near two-year low last week, rising 1.4 per cent against the US dollar in the last seven days. The euro has been rising alongside the British pound on more positive news coming from the ongoing Brexit negotiations and even the rejection of the latest Brexit deal did little to move the euro. Eurozone industrial production figures on Thursday were strong than expected, adding to the euro’s gains. Industrial production rose 1.4 per cent for the month of January against expectations of a 1 per cent lift and rebounding from a 0.9 per cent decline in December.
China’s industrial output growth fell to a 17-year low in the first two months of the year, a sign the country’s economy is continuing to slow. Figures from the National Bureau of Statistics showed industry output rose 5.2 per cent in January-February, below expectations of a 5.5 per cent growth and below December’s 5.7 per cent growth. The data comes just a week after Premier Li Keqiang announced additional tax cuts and infrastructure worth hundreds of billion of dollars in a bit to stimulate economic growth. China also reported its retail sales figures, which were slightly better than expected and its fixed-asset investment growth, which was also stronger.
William is a UTS journalism graduate and has worked at The Sydney Morning Herald. He now covers markets at The Australian Financial Review and keeps a close eye on IPOs.