A misleading end to futures trading on the ASX 200 overnight Friday with a fall of 51 points indicated for the start of trading today.
But while Eurozone shares fell 0.2% on Friday, the US S&P 500 saw a late afternoon rally that resulted in a gain of 1.4% as shares bounced from oversold levels.
Traders in ASX 200 futures seemingly ignored that late rebound, but analysts reckon that investors will have caught up to the fact by the opening later this morning and that 51 point slide won’t matter.
Australian shares ended a choppy session on Friday with a small gain. The ASX 200 rose 11 points or 0.2% on Friday, at 5895 but lost 4.7% for the week to be down 4.37% for the last month and nearly 2.8% lower year to date.
Thursday was the worst session of the week, with the market falling 2.7% in its worst one-day session since the last major sell-off in February.
“Sharemarkets fell sharply over the last week led by the US share market primarily on the back of worries about rising interest rates and bond yields and the deteriorating US/China relationship,” said Shane Oliver, head of investments at AMP Capital and chief economist.
“The risk of a further short-term correction is high given the threats around trade, emerging market contagion, ongoing Fed rate hikes and rising bond yields, the Mueller inquiry, the US mid-term elections, and Italian budget negotiations.
“Property price weakness and approaching election uncertainty add to the risks around Australian shares,” he said in a note at the weekend.
The ASX 200 rose despite small losses on Friday for some of the big banks (they are a major influence on the index), with ANZ down 0.4% at $25.91 and NAB down 0.4% at $25.91. CBA shares edged up 3 cents to $67.03. For the week CBA shares fell4.2%, NAB, 4.8%, Westpac, 3.8%, ANZ a large 6.5% while Macquarie Group shares slumped a huge 7.8%. AMP shares actually rose over the week, ending up 1% at $3.05, small mercies.
Miners put in a better performance, however, with BHP up 1.3% at $33.84 on Friday, OZ Minerals up 2.5% at $8.79 and Rio Tinto up 1.9% at $78.03. But it was a different story over the week with BHP shares down 4.8%, Rio shares off 2.5% and OZ Minerals shares dropping 6.9%.
Safe-haven gold miners were particularly strong both on Friday and over the week as the futures price jumped on Thursday back over $US1,200 an ounce. That saw, Evolution Mining shares jump 10.7% to $3.01 for the week and St Barbara climb 8.9% to $4.03. Regis Resources shares rose 7.2% to $4.16 and Saracen Minerals shares were up 6.5 %per cent to $2.12. But shares in industry leader, Newcrest could only manage a modest 1.7% rise to $19.93 over the week thanks to a 3.2% rise on Friday.
Oil stocks lost ground as oil prices failed to bounce as shares went south. In fact, oil prices are tipping lower so Woodside shares fell 7.7% over the week, Santos saw a 7.6% drop but shares in the Kerry Stokes-dominated Beach petroleum fell a large 15.4% by Friday.
Deals were also a support for the ASX this week, with Navitas shares up 21.9% to $5.29 after a bid from BGH Capital. MYOB jumped 18.1% to $3.52 after receiving a $2.2 billion takeover bid from KKR and shares in pet and vet group, Greencross were up more than 13% (to $4.67) after it said it had received bids.
Nine shares fell 13.7% to $1.84 million and Fairfax closed down 13.5% at 67 cents with Fairfax’s property offshoot Domain also down 12.5% at $2.77 after the merger partners released trading numbers showing weakening trading conditions and revenue pressures. Over the week Fairfax shares lost more than 19% and Nine over 18%. Seven West Media shares fell more than 16% over the week.
Tech firm shares fell sharply in line with what happened on the Nasdaq and elsewhere. Over the week Afterpay Touch shares slid 16.7%to $14.75 and Wisetech Global lost 13.4% to $17.41. Appen shares fell more than 12% after a 4.9% jump on Friday
Qantas shares rallied 3.4% to $5.50 on Friday, as the airline benefited from the fall in the oil price this week. Qantas shares have dropped around 14% since the start of September, with the losses occurring as the oil price climbed. The shares though were down 2.8% for the week.
