A modest rise at best lies ahead for the ASX today (Monday after) Wall Street ran out of puff on Friday and faded into the red in the last session of the week.
But the slide in the value of the Aussie dollar didn’t fade, it fell sharply to a low of 68.61 US cents in trading on Friday night and closed at 68.72 US cents.
That was down more than 1.8% over the week from the previous Friday’s close of 70.02 US cents. A stronger US dollar helped but so did hopes for another rate cut in a fortnight from the RBA.
The slide was despite iron ore prices remaining above $US110 a tonne at the end of a week for the first time in more than five years (See separate story).
Overnight trading on the ASX 200 futures market on Friday ended with an 8 point gain – hardly convincing end to the week.
That was after eurozone shares fell 0.5% on Friday and the US S&P 500 lost 0.2% as trade tensions continued and investors started focusing on this week’s two-day meeting of the US Federal Reserve.
Australian shares rose 1.7% last week and made it to an 11-year-high led by resources stocks and defensive sectors like healthcare, telcos, and consumer staples.
Bond yields were flat to lower with the Australian 10-year bond yield falling to a new record low of 1.37% on Friday as investors turned up their forecasts for another rate cut next month or in August.
The ASX 200 Index rose 110.1 points to 6,554 last week while the All Ordinaries advanced 108.4 points, or 1.7%, to 6,633.6.
The major miners were among the market’s best performers this week, thanks to that 10% surge in iron ore prices over the week.
Fortescue Metals shares rose 12.2% to $8.80 by Friday, BHP shares were up 6.8% to $40.30 and Rio Tinto closed up 7.6% to $105.34.
But the traditional drivers – the big four banks – had a poor week. Commonwealth Bank shares eased 0.3% as did shares in Westpac. ANZ shares fell half a percent and the NAB saw its shares dip 0.6%.
Vocus shares ended up 14.1% after AGL indicated it could offer $3 billion, (or $4.85 a share) for Vocus. AGL shares lost 6.2%.
Challenger shares slumped 18.3% after springing its second earnings downgrade for 2018-19 in five months, and warning that there could be no improvement in 2019-20.
Star Entertainment shares also slumped – down 14.9% to $3.82 after warning of a lower profit in 2018-19 that was actually $20 million more than admitted to because the company used misleading comparison in 2017-18 for the earnings warning
Afterpay Touch shares lost 10% After Austrac, the financial intelligence group, ordered it to appoint an external auditor to produce an audit of its compliance with anti-laundering and anti-terrorism regulations.
Afterpay shares have fallen more than 16% since the AUSTRAC announcement on Wednesday.
The stock closed on Friday down 4.7 percent at $21.61, well below the $23 price for the $400 million share sale at the start of the week.
And retailing’s woes hit Wesfarmers with its share price down 5.1% after it warned that earnings from its Kmart and Target would be lower in the year to June by up to $103 million.
Coles shares eased half a percent on news of the sacking of 450 people at head office ahead of a strategy announcement this week.
