The local share market appears to have stabilised after three straight days of major losses.
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The benchmark S&P/ASX200 index on Tuesday finished up 26.8 points, or 0.41 per cent, to 6496.2. The All Ordinaries was gained 29 points, or 0.43 per cent, to 6696.5.
The modest gains still left the market down 244 points, or 3.7 per cent, from where it finished last Tuesday, before the US Federal Reserve's hawkish predictions of future rate hikes sent global markets into a tailspin.
Saxo Capital Markets Australian market analyst Jessica Amir told AAP that the selloff had left the market oversold and due for a short-term relief rally.
"The technical indicators are suggesting that that we're replaying the same type of setup that occurred back in June," Ms Amir said, referring to a two-month rally in which the market gained 10.8 per cent.
The gains this time around could be in the neighbourhood of eight per cent, Ms Amir said, "but the emphasis is that it's going to be short.
But there are opportunities to pick up bargains, she said.
Investors were doing that on Tuesday in the energy and mining sectors, which rose 1.7 and 2.6 per cent, respectively, after suffering their worst losses since early in the pandemic on Monday.
BHP rose 2.8 per cent to $37.20, Fortescue Metals added 5.5 per cent to $16.82 and Rio Tinto gained 3.0 per cent to $90.39.
Coalminers Whitehaven Coal and New Hope Corporation both rose a bit more than six per cent, recovering from their double digit selloff on Monday.
"So what happened yesterday was that the Australian government announced that up to 30 new coalmine licenses or applications were being reviewed," Ms Amir explained.
"So that potentially means more coalmining supply coming into the market, so we saw coal companies get sold off... but today, I think the market is realising the fact is that we export the majority of our coal, and we still have a lack of supply, so that fundamental overarching concern is likely to support higher coal prices," she said.
Elsewhere in the sector, Woodside Energy was up 1.6 per cent to $30.67 and Santos had added 1.0 per cent to $6.95.
The heavyweight financial sector was more subdued, declining 0.3 per cent, with a mixed performance from the big banks.
ANZ rose 0.5 per cent to $23.15, but Westpac dropped 0.6 per cent to $21.06, NAB dipped 0.3 per cent to $29.25 and CBA fell 0.2 per cent to $93.43.
The real estate sector was the biggest laggard, falling 2.2 per cent as Australian 10-year bond yields hit a three-month high of over four per cent and three-year bond yields hit a decade high of 3.68 per cent.
"It means there's headwinds ahead for Aussie tech and Aussie property," Ms Amir said.
On Tuesday, however, the tech sector managed to rise 0.5 per cent, but real estate companies Goodman Group, Vicinity Centres and Scentre Group all fell by between 2.3 and 2.5 per cent. Office tower owner Dexus dropped 3.1 per cent.
Meanwhile the Aussie dollar slipped lower against the greenback, which is hitting multi-year highs against virtually every currency.
The Aussie was buying 64.96 US cents, from 65.18 US cents at Monday's close, and had traded as low as 64.42 US cents.
ON THE ASX:
* The benchmark S&P/ASX200 index on Tuesday gained 26.9 points to 6496.2, a gain of 0.41 per cent.
* The broader All Ordinaries rose 29 points, or 0.43 per cent, to 6696.5.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.18 US cents, from 65.18 US cents at Monday's close
* 93.69 Japanese yen, from 93.78 yen
* 67.23 Euro cents, from 67.31 cents
* 60.11 British pence, from 60.79 pence
* 113.78 NZ cents, from 113.56 cents.
Australian Associated Press