The S&P/ASX200 had been down by as many as 128.8 points, or 1.65 per cent, to a four-week intraday low of 7,654.2 in the first 40 minutes of trading on Thursday as markets repriced the odds of an interest rate hike in 2024 to combat stubborn inflation.
But from late morning onwards, the benchmark index steadily gained ground as buyers stepped in, finishing on the highs of the day at 7,759.6, down just 23.4 points or 0.3 per cent. The broader All Ordinaries fell 20.1 points, or 0.25 per cent, to 8,002.8.
With one more day of trading left in June, the market closed Thursday up 0.8 per cent for the month, down 1.8 per cent for the quarter but up 2.2 per cent for the year.
Technical analysts would describe Thursday's price action as a "hammer pattern", with the quick rally that followed the morning sell-off a bullish sign for further gains.
Five of the ASX's 11 sectors closed lower on Thursday, three closed higher and three were basically flat.
The real estate sector was the biggest loser, dropping 2.3 per cent as Dexus, Mirvac, APA Group, GPT Group, Charter Hall, BWP Trust and Stockland all traded ex-dividend.
Judo Capital Holdings was the biggest loser in the ASX200, dropping 6.3 per cent to a four-week low of $1.255.
The Big Four banks all finished in the red, with CBA and ANZ both falling 0.6 per cent, to $126.20 and $28.29, respectively. NAB fell 0.7 per cent to $36.03 and Westpac retreated 0.8 per cent to $27.09.
In the heavyweight mining sector, BHP dipped 0.4 per cent to $43.15 while Rio Tinto added 0.5 per cent to $121.54 and Fortescue edged 0.1 per cent higher at $21.67.
In health care, Resmed gained 4.1 per cent to $28.78, although shares in the CPAP machine manufacturer are still down 10 per cent for the week. They plunged on Monday after a clinical study indicated that an Ozempic-style weight loss drug, Zepbound, was an effective treatment for sleep apnoea.
Elsewhere in the sector, Immutep plummeted 23 per cent to a four-month low of 33.5c as the biotech released what it described as positive results from a clinical trial evaluating using its immunotherapy drug candidate to treat head and neck cancer.
Traders may have been hoping for even better results from the study.
On the flip side, Baby Bunting soared 19 per cent to a nearly two-month high of $1.47 after the baby retailer announced that trading had improved following the introduction of new product assortments and a renewed focus on new customer acquisition.
"While it is still early days, it is pleasing to see the impact of some of our strategic initiatives on our comparable sales performance over the past eight weeks," chief executive Mark Teperson said.
The Australian dollar was buying 66.67 US cents, from 66.84 US cents at Wednesday's ASX close.
ON THE ASX:
* The benchmark S&P/ASX200 index finished Thursday down 23.4 points, or 0.3 per cent, at 7,759.6.
* The broader All Ordinaries dropped 20.1 points, or 0.25 per cent, to 8,002.8.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 66.67 US cents, from 66.84 US cents at Wednesday's ASX close
* 106.95 Japanese yen, from 106.83 Japanese yen
* 62.35 euro cents, from 62.48 euro cents
* 52.76 British pence, from 52.70 pence
* 109.47 NZ cents, from 109.28 NZ cents.
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