The local share market has closed higher for a fourth straight day, finishing above the 7000 level for the first time in two and a half weeks ahead of another monthly report on U.S. inflation.
The benchmark S&P/ASX200 index on Tuesday closed up 45.2 points, or 0.65 per cent, to 7009.7. The broader All Ordinaries gained 45.5 points, or 0.63 per cent, to 7253.7.
InvestSMART head of strategy Evan Lucas said global markets had moved higher in advance of the U.S. consumer price index reading for August, to be announced on Tuesday night, Australia time. But Lucas wasn’t optimistic that the gains would last.
“There is every chance the market has gotten overly excited,” he said.
Lucas expects headline inflation would go down, but core inflation—which strips out more volatile items such as food and energy prices—would grow.
“Core inflation tells us that the Federal Reserve will continue to raise rates really hard over the next couple of months, and that’s going to throw a massive curveball,” he said.
“You'll probably see a sell-off.
“It‘ll be volatile. It’s likely that they’ll fall (on Wall Street), and we'll wake up and do the same.”
On Tuesday, though, nine of the ASX’s 11 official sectors were higher, with healthcare and tech the only areas to lose ground as two big takeover bids floundered.
Ramsay Healthcare plummeted 10.6 per cent to a six-month low of $62.74 after a consortium led by leading private equity firm Kohlberg Kravis Roberts (KKR) walked away from its nearly $30 billion takeover offer for the private hospital chain.
It was not clear whether talks would resume.
In tech, the sector fell 0.3 per cent in its first loss in six days after a regulator’s ruling in the United Kingdom threw a snag into Link Group’s pending $2.5 billion acquisition by Canada’s Dye & Durham.
The superannuation services administrator plummeted 20.1 per cent to a nearly three-month low of $3.58 after Britain’s Financial Conduct Authority said a Link Group subsidiary could be forced to pay up to £306 million ($A519m) to redress investors in a collapsed UK investment fund.
The big banks were all higher, however, with CBA up 1.7 per cent to $97.94, NAB up 1.0 per cent to $30.28, and Westpac and ANZ both adding 0.6 percent, to $21.59 and $23.48.
The mining sector was up 0.5 percent despite losses for BHP and Fortescue Metals.
The Big Australian dipped 0.3 per cent to $39.30 while FMG fell 0.9 percent to $18.23, but Rio Tinto was up 0.7 percent to $96.75, and Pilbara Minerals gained 3.7 percent to an all-time high of $4.74.
Atlas Arteria was in a trading halt as the toll-road operator announced it would acquire a two-thirds stake in the Chicago Skyway toll road for $US2 billion, in defiance of a superannuation fund manager that owns 19 percent of Atlas.
“We are disappointed with the decision by Atlas Arteria to proceed with the acquisition of Chicago Skyway, and as a major shareholder, we are considering our options,” an IFM Investors spokeswoman told AAP.
Star Entertainment Group gained 4.5 per cent to a nearly two-week high of $2.78 after an NSW inquiry alleged widespread misconduct but left open the possibility of the company retaining its casino licence if it overhauled its systems.
Back in healthcare, Imugene was up 2.2 percent to 23 cents after the biotech company raised $80 million in an institutional placement at 20c per share, an 11.1 percent discount. The funds will be used to progress Imugene’s clinical trials.
AVITA Medical grew 5.2 per cent to $1.925 after its spray-on-skin treatment showed promise in treating vitiligo in a clinical trial involving 49 patients suffering skin depigmentation.
Meanwhile, the Australian dollar was buying 68.77 US cents, from 68.81 US cents at Monday’s close.
ON THE ASX:
* The benchmark S&P/ASX200 index on Tuesday climbed 45.2 points to 7009.8, a 0.65 per cent rise.
* The broader All Ordinaries gained 45.5 points, or 0.63 per cent, to 7253.7.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 68.79 US cents, from 68.79 U.S. cents
* 98.00 Japanese yen, from 97.54 yen
* 67.85 Euro cents, from 67.93 cents
* 58.74 British pence, from 59.00 pence
* 112.21 NZ cents, from 111.97 cents.
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