ASX 200 Rebounds 0.6% as Tech Stocks Rally and Oil Tops $100, Leaving a Volatile Week Roughly Flat Overall

SYDNEY — Australian shares bounced back on Friday after their worst session in months, as a rally in technology stocks and energy producers helped the benchmark index recover part of Thursday's steep losses and end a turbulent week little changed.

The S&P/ASX 200 index rose 50.2 points, or 0.58%, to 8,664.6. The gain followed a 2% slide on Thursday that pushed the index to its lowest level since mid-June and wiped about A$50 billion from the market's value.

Friday's rebound left the index roughly flat for the week, after it had rallied as much as 1.6% by midweek before Thursday's tumble.

A modest bounce after Thursday's sell-off

The recovery was broad but measured. Market Index lead writer Kerry Sun described the move as a small oversold bounce, noting that investors remain focused on whether bond yields and oil prices have peaked.

The market's largest stocks opened slightly higher, with banks and miners recovering some ground after falling about 3% on Thursday. BHP rose 0.8% early in the session, while Rio Tinto, National Australia Bank, Westpac and Woodside Energy also edged higher.

Tech sector leads

Technology stocks led the advance. The S&P/ASX 200 information technology index climbed 3.2% on Friday and was on track for a 6% gain for the week, its best weekly performance since August, though it has only recently come off a six-month low.

Data#3 extended its rally for a second day, rising as much as 9.4% and hitting another record high. The IT services company jumped nearly 14% on Thursday after forecasting first-half pre-tax profit growth of more than 40%, well above analysts' expectations. Broker Jarden upgraded the stock on Friday.

Software and tech names that have struggled this year also bounced. Life360, WiseTech Global, Xero and Megaport all gained, with Hansen Technologies rising about 9%.

Praemium shares rose about 8% after the investment platform provider announced its chief executive, Anthony Wamsteker, had resigned with immediate effect.

Codan, which has surged about 30% this week after upgrading its profit outlook, overtook WiseTech as the largest technology stock on the Australian market.

Energy stocks rebound as oil climbs

Energy shares recovered after falling 3% on Thursday, as oil prices pushed higher. Brent crude climbed back above $100 a barrel and has gained more than 6% over the past two sessions.

The rally followed reports that the United States is sending a third aircraft carrier strike group toward the Middle East, along with up to 10,000 additional sailors and Marines, as the conflict with Iran continues. Oil also drew support from news that Chinese refiners had suspended fuel exports to destinations outside Hong Kong and Macau.

Gas markets remain tight. The chief executive of Japan's Jera, the world's largest buyer of liquefied natural gas, said he does not expect Qatari supply to return soon.

"We don't expect Qatar LNG coming back to the market soon," Jera CEO Yukio Kani said.

Bond yields ease

Some relief came from the bond market. Australia's policy-sensitive three-year government bond yield has fallen 13 basis points over the past four sessions to about 4.92%.

Overnight, U.S. Treasury yields hit their highest levels since 2002 early in the session before reversing. The 10-year yield rose as high as 5.344% before ending lower at 5.24%, while the two-year yield fell 10 basis points as traders reduced bets on a Federal Reserve rate hike this month.

Federal Reserve Vice Chair Philip Jefferson said policymakers "will need to come to our own judgment, which may take more time," on the path of interest rates.

The gap between Australian and U.S. 10-year bond yields has narrowed to about 12 basis points, its smallest in more than a year, as markets expect the Fed to raise rates more aggressively than the Reserve Bank of Australia.

Wall Street steadies

U.S. stocks closed modestly higher overnight after recovering from early losses. The S&P 500 rose 0.19%, the Nasdaq gained 0.04% and the Dow added 20 points. Accenture shares surged after the consulting firm posted strong results.

After the U.S. close, Nike shares fell 8.5% in after-hours trading after the sportswear giant's full-year earnings guidance fell well short of expectations.

Lithium and rare earths under pressure

Lithium stocks remained among the week's weakest performers. Macquarie cut its spodumene price forecasts and lowered price targets across its lithium coverage, including Pilbara Minerals owner PLS, IGO and Liontown Resources.

Liontown, which plunged this week after approving a A$389 million expansion of its Kathleen Valley mine, ended the week down about 17%.

Lynas Rare Earths fell nearly 10% for the week after announcing a A$968 million all-scrip deal to acquire Meteoric Resources. UBS trimmed its price target on Lynas to A$21 but kept a buy rating.

Corporate news

Macquarie upgraded Rio Tinto to outperform and Transurban to outperform following the toll road operator's A$4.5 billion deal to increase its stakes in key Sydney motorways.

OFX Group said it was investigating a cybersecurity incident involving unauthorized access to some client data, though it found no access to client accounts or funds.

Meanwhile, Nvidia-backed data center operator Firmus is seeking a A$43.7 billion valuation in what could be one of the largest initial public offerings in Australian history, with shares priced at A$11 and a debut targeted for Oct. 23.

Investors will turn their attention to Friday's U.S. jobs report, which could shape expectations for Federal Reserve policy and global bond yields. Locally, the September consumer price index on Oct. 28 and the Reserve Bank of Australia's Nov. 3 policy meeting remain key events for markets.