Markets live, Tuesday March 8, 2022

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Traders bought into the flood recovery on the ASX on Tuesday, with supermarket and discount homewares rising, as miners and oil producers dragged despite soaring global prices.

Trading volumes surged again on the ASX as traders position themselves for the dual threat of rising prices and rising interest rates amid a highly unstable geopolitical situation.

The S&P/ASX 200 benchmark dropped 0.8 per cent to 6980 points, the lowest close in six sessions, following sharp drops on Wall Street. Futures pointed to further overnight declines.

Retail stocks came to the fore on Tuesday as investors positioned themselves for flood recovery.

Retail stocks came to the fore on Tuesday as investors positioned themselves for flood recovery. Credit:Andrew Sibley/Getty Images

Record high commodity prices and potential shortages in materials sourced from Russia and Ukraine, such as wheat, nickel, natural gas, neon gas, and aluminum has not changed expectations the US Federal Reserve would next week start raising interest rates for the first time in two years.

Oil prices remained at 14-year highs, but profit taking saw Woodside, Santos, Ampol, and Beach Energy closing lower. Viva Energy dropped 4.2 per cent after revealing it would boycott Russian oil, but explorations and engineering services company Worley gained 1.4 per cent.

And in Australia widespread flooding along the highly populated east-coast added to concerns, with millions of people and businesses now facing huge clean-up efforts and repair bills.

Shaw & Partners senior investment advisor Adam Dawes said he was buying Wesfarmers for exposure to post-flood repair, replace, and rebuilding efforts. Wesfarmers owns Bunnings, Kmart, and Officeworks, which would likely see high demand for new clothing, linen, furnishings, phones and computers, he said. Shares gained 0.7 per cent.

Woolworths gained 3.4 per cent and Coles gained 1.9 per cent in anticipation of millions of households replacing spoiled groceries.

“We don’t want to take advantage of people’s suffering, but it makes sense that these kinds of things are going to be needed in the long term,″⁣ Mr Dawes said.

Insurance Australia Group dropped 1.6 per cent and Suncorp fell 0.9 per cent, but QBE Insurance Group gained 0.4 per cent. Commonwealth Bank and NAB improved, while Westpac and ANZ declined.

The mining sector reversed gains with BHP falling 3.7 per cent after hitting $50 last week. And rare earths miner Lynas dropped 3.7 per cent after touching $11 last Thursday for the second time this year. But this had created a technical ‘double top’, said Mr Dawes, and the stock price was now likely to decline.

South32 dropped 6.5 per cent, Rio Tinto declined 4.3 per cent, and Fortescue dropped 4.5 per cent. Gold miner St Barbara gained 12.7 per cent on merger rumours.

Biggest wins:

  • St Barbara 12.7%
  • Imugene 4.4%
  • Mesoblast 4%
  • Woolworths 3.3%
  • CSL 2.85

Biggest losers

  • Nickel Mines -10.6%
  • Bluescope Steel -8.8%
  • Liontown Resources -7.9%
  • South32 -6.5%
  • Oz Minerals -6.1%

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