ASX: Australian shares rebound sharply in potential Santa Claus rally ahead of Christmas

The local share market is rallying as traders snap up bargains following five days of losses.

At midday AEDT on Tuesday, the benchmark S&P/ASX200 index was up 71.4 points, or 0.87 per cent, to 8,320.2, while the broader All Ordinaries had gained 70.5 points, or 0.83 per cent, to 8,564.5.

“It appears the Santa Claus rally has officially kicked off for 2024, right on cue in mid-December,” said IG market analyst Tony Sycamore, who last week correctly predicted the ASX200 would pull back to near 8,200 after it fell through support at 8,350 (it fell to 8,236.7).

Mr Sycamore has now turned bullish, predicting further gains into the year’s end.

That would fit a traditional pattern to a tee.

December is seasonally a strong time for equities, but there’s typically some weakness towards the start of the month and then a rally into the holidays.

The ASX200 at midday was still down 1.4 per cent for the month, having fallen two per cent over its five-day losing streak.

At midday, however, every sector was in the green except energy and utilities.

The telecommunications sector was the biggest gainer, up 1.4 per cent as realestate.com.au owner REA Group added 3.1 per cent.

All of the big four banks were higher, with ANZ and NAB both rising 1.6 per cent, CBA climbing 1.4 per cent and Westpac adding 0.8 per cent.

In the heavyweight mining sector, BHP was up 0.5 per cent while Rio Tinto had dipped 0.2 per cent and Fortescue had edged 0.1 per cent lower.

In the tech sector, Data#3 was down 7.6 per cent to $6.86 after the IT solutions provider said late on Monday that Microsoft was restructuring its partner incentives for services that Data#3 resells.

Data#3 said it was well-placed to adapt the changes, but clearly they had caused some trepidation for investors.

Novonix had grown 6.0 per cent to 62 cents after the US Department of Energy committed $US754.8 million to finance the battery metal’s proposed new synthetic graphite facility in Chattanooga, Tennessee.

The loan is an effort to diversify the US supply chain for manufacturing electric vehicles, with China currently possessing 95 per cent of the market share for battery-grade graphite.

In the energy sector, Karoon Energy had fallen 7.0 per cent to $1.2975 after the oil and gas producer downgraded guidance, citing the impact of Hurricane Rafael in the Gulf of Mexico and a mooring issue at its floating oil platform off the coast of Brazil.

Data centre operator Digico was on track for its first day of gains after making its debut on the bourse on Friday. DGT shares were up 5.1 per cent to $4.52, still below its IPO price of $5.

Food and beverage company SPC Global Holdings returned the bourse on Tuesday following a nearly two-decade absence, after its acquisition by Coca-Cola Amatil in 2005.

The company now includes SPC, the Original Juice Company and Nature One Dairy. Its share were trading at $1.40, down 6.6 per cent from the $1.50 price of the initial offering that raised the firm $2.4 million.