ASX rebounds amid China reopening rumours


The local share market has finished higher after treading water this morning, with the mining sector leading the rebound on rumours that China’s leadership might relax its harsh zero-COVID policies.

The benchmark S&P/ASX200 index on Tuesday finished up 24.2 points, or 0.33 per cent, to 7253.3, while the broader All Ordinaries gained 23.4 points, or 0.32 per cent, to 7442.

“It’s a remarkable turnaround,” said Tribeca Investment Partners portfolio manager Jun Bei Liu, who credited the rebound to word that China’s state council would be holding a press conference later on Tuesday.

There was hope that the briefing might be to announce a relaxation of China’s harsh COVID-zero policies, Ms Liu said, given the rare protests engulfing major Chinese cities since the weekend.

While Ms Liu thought a major shift in policy was unlikely, the Hang Seng China Enterprises Index was up as much as five per cent on Tuesday, with a bailout for China’s property sector also lifting sentiment.

The ASX’s 11 official sectors were mixed, with four rising and and seven losing ground.

Materials was the biggest gainer, climbing 1.7 per cent as BHP added 2.1 per cent to $44.82, Rio Tinto grew 3.5 per cent to $107.83 and Fortescue Metals advanced 2.2 per cent to $19.46.

In the energy sector, Woodside dropped 0.4 per cent to $36.83 despite raising its production forecasts for 2022/23.

Santos added 1.1 per cent to $7.33 despite announcing it had found a small gas leak at one of its gas platforms off the coast of WA, which will be shut down for four to six weeks for repairs.

Coalminers Whitehaven and New Hope were both down around two per cent after a strong day on Monday.

Most of the big retail banks finished higher, with ANZ up 0.8 per cent to $24.91, and both Westpac and NAB gaining 0.3 per cent, to $23.83 and $31.69, respectively. CBA was the outlier, falling 0.4 per cent to $108.09.

Fisher & Paykel Healthcare soared 9.8 per cent to a seven-month $21.09 after the Kiwi respiratory care company delivered $NZ20 million more in half-year revenue than it had forecast.

Ms Liu said it was something of a relief rally for the stock, which is still down 30.9 per cent on the year.

Collins Foods plummeted 19.8 per cent to a two-year low of $8.05 after the KFC franchisee said it was pausing its rollout of Taco Bell restaurants and taking an $11.9 million impairment on eight underperforming ones.

“We are refining every element of the (Taco Bell) business, from marketing and media spend to portioning and product quality, to ensure we meet and exceed customer expectations,” said managing director and chief executive Drew O’Malley.

In microcaps, Microba Life Sciences soared 52.3 per cent to 33.5c after Sonic Healthcare agreed to pay $17.8m for a 19.99 per cent stake in the Brisbane-based gut health company.

The Australian dollar was buying 66.58 US cents, from 66.74 US cents at Monday’s ASX close.

ON THE ASX:

* The benchmark S&P/ASX200 index on Tuesday closed up 24.2 points, or 0.33 per cent, at 7253.3.

* The broader All Ordinaries gained 23.4 points, or 0.32 per cent, to 7442.

CURRENCY SNAPSHOT:

One Australian dollar buys:

* 67.04 US cents, from 66.74 US cents at Monday’s close

* 92.86 Japanese yen, from 92.58 Japanese yen

* 64.55 Euro cents, from 64.55 Euro cents

* 55.83 British pence, from 55.48 British pence

* 107.94 NZ cents, from 107.68 NZ cents.



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