The ASX is looking at a continuation today of last week’s solid run which saw the market up 2.2% – its best weekly performance for some time.
Overnight trading on Friday night saw ASX futures end with a 13 point gain – suggesting the physical market will open a touch higher later this morning.
Eurozone shares rose 0.9% on Friday and the US S&P 500 was up 0.2% as energy shares reacted positively to news of a smaller than expected OPEC output increase.
But the US share market gave up some of its gains into the close thanks to Donald Trump’s tweet regarding tariffs on auto imports from Europe.
The futures gain came after the ASX 200 dipped 6 points to end the day at 6,225 on Friday.
The strength of the ASX was in sharp contrast to the performance of other markets last week.
US shares were down 0.9%, Eurozone shares dropped 1.9%, Japanese shares down 1.5% and Chinese shares slumped 3.8% and emerging market shares remaining under pressure.
Commodity prices weakened for most of the week thanks to the stronger US dollar and weaker Aussie and yet that and Trump’s trade blustering didn’t impact local investor sentiment.
If anything it was a very solid rise in the value of bank for most of the week as the gloom for commentators and analysts in the wake of the banking royal commission disappeared.
Hearings this week though will set teeth on edge with the banks’ rural loans under the microscope.
CBA shares rose 7% to $73.86 last week, Westpac climbed 5.3% to $29.38, NAB also was up by a similar amount – 5.6% to $27.64. ANZ, which on Friday told investors that it would double its buyback program to $3 billion, was the best of them with a 7.4% jump to $28.65.
Macquarie shares joined the gainers with a 4.1% rise to $122.03 (a new high) by Friday’s close in the wake of broker upgrades.
South32, Atlas and late in the week, APN Outdoor, dominated deals. South32 shares were down more than 6% over the week after it said it was buying Arizona Mining for more than $1 billion while Atlas is now subject to a $390 million bid from Gina Rinehart’s Hancock prospecting
APN Outdoor shares jumped 12.7% to $6.40 after raising its final bid for Here, There & Everywhere’s Adshel to $540 million at the same time as it fends off a $1.1 billion proposal from French giant JCDecaux.
The French company doesn’t want it to bid for Adshel and APN’s decision to raise the offer by $40 million is an emphatic rejection of the French offer.
Insurance Australia Group shares were 6.2% higher at $8.57 over the week after investors rewarded its plan to sell off three of its operations in Asia for more than $525 million. The sale of its interests in Thailand, Indonesia and Vietnam will settle in early 2018-19.
CSL was another standout, with the blood products firm jumping 7.6% to end the week at $198.97, within sight of the $200 mark.
Telstra shares naturally lost with the mixed reception to its investor day news of job cuts, write downs and weak outlook for revenues. Its shares lost 8.8% to $2.68 as investors punished the firm after chief executive Andy Penn’s break-up strategy failed to offset a 2018-19 earnings downgrade.
Ramsay Healthcare was another loser – its shares down 4.8% to $56.11 after cutting full-year guidance and a $125 million charge relating to an onerous lease provision and asset write-downs related to six British sites.
On Wall Street the Dow rose 119.19 points, or 0.5%, to 24,580.89, ending an eight-day losing streak, while the S&P 500 added 0.2%, or 5.12 points, to end at 2,754,88 and the Nasdaq closed down 20.13, or 0.3%, at 7,692.82.
All three benchmarks finished off their best levels of the day in the final minutes of trade.
For the week, the Dow lost 2%, its largest weekly decline since March 23, and its second straight weekly fall. The S&P 500 lost 0.9% and the Nasdaq booked a weekly drop of 0.3%, ending its streak of weekly gains of four.
