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The Australian sharemarket is barely hanging onto gains at lunch on Wednesday, with the ASX 200 lifting by 0.07 per cent to 5,946.5. While the index was up by as much as 0.7 per cent on the open, losses from banks and mining companies have erased most of the market’s advance. The ASX 200 has struggled to break through 6,000pts following yesterday’s 3.89 per cent surge, which was the best day in 10 weeks for the market.

The US sharemarket rose by as much as 2 per cent overnight, following encouraging retail spending data. Retail trade surged by almost 18 per cent in May; twice the lift expected by economists and a record improvement. This shows confidence on the part of Americans, as consumers lift spending as the economy gradually reopens. In recent days, reports that the Trump administration is readying a US$1 trillion stimulus package and more aggressive support from the Federal Reserve has pushed equities higher.

A risk continues to be the spread of the coronavirus in China and the US. Over the past 24 hours, Beijing has reportedly ordered all schools to close in an effort to contain the disease. Another food market near a financial district was also shut, while people must now be tested before leaving the city. With 21 million people living in China’s capital (twice as many as in Wuhan), the risk of a potential city-wide lockdown would be a significant measure Chinese authorities would try to avoid if possible.

The Australian market is being held back most by mining and bank stocks. Utilities and energy stocks are also down slightly. The ASX’s five largest banks – CBA, WBC, NAB, ANZ, MQG – are all coming under pressure, with ANZ the worst performer, down by 2 per cent. Within the mining sector, Fortescue (FMG), BHP and gold miners are weighing most heavily.

A handful of companies are helping to keep the market slightly higher at lunch. This includes Transurban (TCL), Fisher & Paykel (FPH), ResMed (RMD), A2 Milk (A2M), Car Sales (CAR) and CSL Limited (CSL).

Infigen (IFN) is up 8.5 per cent after Spanish utility Iberdrola agreed to pay $835m to buy the group. IFN is one of Australia’s largest wind farm operators. The offer of $0.86 per security is around a 5 per cent premium to Tuesday’s market capitalisation.

2.2bn shares have changed hands so far, worth $3.9bn. 590 stocks are up, 542 are down and 324 are unchanged.

Published by CommSec