Markets wrap: Miners, energy firms help ASX 200 recover from early dive

The Australian sharemarket recorded a modest gain on Thursday after a commodity price surge powered gains for several energy and mining behemoths.

Surging commodity prices surge may have spooked overnight traders but Australia’s resource-heavy sharemarket managed to brush aside inflation fears on Thursday and register a narrow gain.

Mining titans BHP and Rio Tinto dragged the local index higher with energy firms Woodside Petroleum and Santos, even after US markets hit the skids on the latest oil price leap.

The benchmark ASX 200 finished 9.2 points, or 0.1 per cent, higher at 7387.1 in its seventh – but narrowest – gain of the past nine sessions.

The broader All Ordinaries rose 4 points, or 0.1 per cent, to close the day at 7669.0 while the Aussie dollar slipped from 75 US cents to fetch 74.79 US cents at the local close.

The benchmark ASX 200 finished 9.2 points, or 0.1 per cent, higher at 7387.1 in its seventh – but narrowest – gain of the past nine sessions. Picture: NCA NewsWire / Jeremy Piper

The local market looked destined to follow Wall Street lower – and even fell by as much as 0.3 per cent at the open – as the latest developments in Eastern Europe sent a fresh wave of inflation jitters through equities.

Growth sectors such as technology and health took a breather while the major banks were mixed.

That said, the local bourse performed an about face after an hour or so and eventually rode mining and energy firms into positive territory.

BHP was a major winner, climbing 1.8 per cent to $49.30 after iron ore jumped 5 per cent to $US115. Rio Tinto also rose, adding 2.1 per cent to finish the day at $116.01, while shares in Mount Gibson Iron jumped 8.1 per cent to 60 cents.

Energy prices shot higher – especially for natural gas – after it was reported Russia was looking to “create a mechanism” where its exports are paid in Rubles, a play that IG Markets analyst Kyle Rodda said suggested market disruptions will linger for some time yet.

Energy prices shot higher – especially for natural gas – after it was reported Russia was looking to “create a mechanism” where its exports are paid in Rubles. Photo via Vincent Mundy/Bloomberg

“Energy markets were where the action was … and perhaps responsible for some of the volatility that bled into equities,” Mr Rodda said.

“The (Ruble) news put energy markets back at the centre of negotiations for the war in Ukraine, raising the risk that the west will simply not want to comply with the demand, and will in effect, cut Russian supply from the markets.

“That would, as we know, be a major drag on growth and another inflationary pressure.”

Woodside Petroleum ended the day 2.8 per cent higher at $33.20 after crude oil added another 5.6 per cent to climb above $US120 a barrel.

Santos rose 1.5 per cent to $7.89, Origin Energy rose 3 per cent to $6.29, AGL added 2.9 per cent to $7.48, and APA was up 2.1 per cent to $10.32.

Gold miners also rose after the precious metal rebounded to be trading at $US1945 – supported by a jump in risk aversion – with Newcrest shares up 2.2 per cent to $26 and Northern Star 1.6 per cent higher at $10.56.

CSL finished 0.1 per cent lower at $267.40 and Cochlear and Pro Medicus each dropped 0.8 per cent, while Resmed finished 4.2 per cent down and Fisher and Paykel lost another 3.5 per cent. Picture: NCA NewsWire / Jeremy Piper

Afterpay owner Block handed back a slice of its recent surge, falling 2.3 per cent to $183.80, while buy now, pay later rival Zip Co ended 5.2 per cent down at $1.56.

There were also losses for Wisetech Global, Xero, Appen, and Megaport, while healthcare names also slumped.

CSL finished 0.1 per cent lower at $267.40 and Cochlear and Pro Medicus each dropped 0.8 per cent, while Resmed finished 4.2 per cent down and Fisher and Paykel lost another 3.5 per cent.

Elsewhere, Commonwealth Bank dropped 0.1 per cent to close the session at $107.35, ANZ fell 0.6 per cent to $27.72, and Macquarie Group ended the day 1.7 per cent down at $196.59.

Westpac rose 0.4 per cent to $23.89 and NAB was 0.2 per cent better off at $31.79.