A 55 point rise on Friday saved the Australian sharemarket from a nasty little loss last week, but a slide on Wall Street on Friday night in the wake of weak reports from Facebook, Twitter and Exxon Mobil has opened the way for the ASX to open down more than 20 points this morning.
It was the combination of a sharp fall in the value of the Australian dollar and a leap in mining giant BHP after it sold its troubled US onshore oil and gas interests – that helped lift the sharemarket to a fresh decade closing high marginally above 6,300 points.
The ASX 200 closed up 55.7 points, or 0.89% but the ASX futures market was showing a 26 point loss when trading ended on Saturday morning.
The ASX 200 index rose 14.3 points, or 0.2% last week, to 6300.2, beating the previous 10-year high by 14 points.
But that optimism didn’t save Kogan.com from a small fall of 1.1% in Friday’s bullish market, taking the week’s loss to a nasty 23.7% after a less than successful trading update early in the week. BHP shares ended 4.5% higher to $34.40. The company announced the sale of its US shale assets for $US10.5 billion. Rio Tinto shares also rose 1.6% to $81.38 ahead of the release of its interim report next Wednesday.
South32 shares closed the week 2.5% higher at $3.63 but it looks as though an industrial dispute at a coking coal export mine south of Sydney will continue for a while longer.
Newcrest Mining shares had a good week – up 5.9% to $21.38 on Friday. Record gold production at its Lihir mine in Papua New Guinea heped along with the strong recovery at its huge Cadia mine in NSW after problems from earthquakes in 2017 and 2018.
Volatile rare earths miner, Lynas Corp saw its shares surge 15.4% to $2.33 after a favourable commentary from UBS.
Fairfax shares closed the week flat at 80.5¢, Domain shares were 8.1% higher at $3.35 and shareholders in Nine Entertainment paid the price with the shares down 13.1% to 42.19, a level not seen since February of this year.
Kerry Stokes’ Seven West Media fell 3.9% to 85.5 cents for a loss on the week of 3.9% (ie all coming on Friday) as investors counted it out of te Fairfax-Nine deal.
Based on Friday’s closing price for Nine, its offer price for Fairfax is worth 81.9 cents while Fairfax shares ended at 80.5 cents. That means no one thinks there will be a counter offer.
The growing drought forced Nufarm to cut its earnings forecasts to between $255 million and $270 million, down from the $317.4 million it was forecasting in May.
The company said that Australian farmers had been spending less on crop protection due to the poor winter crop and local earnings would be down 90% to around $US50 million. Nufarm shares fell 13.6% to $7.27.
Fairfax shares fell 3.6% on Friday and the shares ended flat on the week. Nine shares continued their slide of Thursday, losing another 3.1% and closed at $2.19, a level not seen since last February and down 13% for the week.
Domain shares ended flat on Friday on $3.35 and were up 8% for the week and the winner.
Kerry Stokes’ Seven West Media fell 3.9% to 85.5 cents for a loss on the week of 3.9% (ie all coming on Friday). It hit a year’s high of 92.2 cents in Thursday’s trading, so its loss from that peak was 12% in just over 24 hours, a real loss of investor appetite.
AMP announced on Friday that the cost of its governance scandals would be about $500 million over the next few years.
It said it was putting aside $290 million to compensate customers who received poor or no advice, going back 10 years. It also forecast a fall in first-half underlying profits. Its shares fell 9.1% to $3.30, a new 15 year low.
