The ASX is looking at a weak start this morning after traders pushed the ASX 200 futures market down 23 points on Friday night.
That was after the market closed last week higher, rising 29 points or half a percent – a solid effort but well behind sharper rises in major offshore markets like the UK, Europe, Japan, and Asia.
US shares rose 0.9%, Eurozone shares gained 2.1%, Japanese shares rose 3.4%, Chinese shares rose 5.2% and UK shares were up 1.5%.
Local investors though will be the first to react to the surge in metal prices on Friday, led by copper which was up 4.6% on Friday in its biggest one day gain for more than five years.
Gold fell through, oil was up, the Aussie dollar rose strongly and there’s the prospect of an interest rate rise from the US Federal Reserve mid-week.
Traders though will have to contend with a Wall Street Journal report that China canceled the talks with the US and will no longer send Vice-Premier Liu He to Washington this week.
A mid-level delegation from China had been due to travel to Washington to prepare the way for Liu’s trip, and that visit has also been scrapped, according to the newspaper’s website. China though is reportedly leaving open the possibility of holding fresh negotiations next month.
That news might see investors reassess the outbreak of confidence on Friday.
The rise in metal prices boosted the local materials sector, with BHP Billiton and Rio Tinto leading the market for most of the week, helped by Rio detailing its share buyback and capital return to Australian and UK based shareholders.
BHP Billiton rose 5.5% to $33.58, while Rio Tinto advanced 8.7% to $79.49 this week. South32 closed the week 4% higher at $3.90 and Fortescue Metals lifted 7.9% to $3.95 as iron ore prices in China again failed to slide on those fears about the US-China trade war.
The smaller miners also recorded strong gains this week, led by lithium miner, Pilbara Minerals which rose 15% to 88 cents. Western Areas closed the week 10.2% as nickel prices surged, higher at $2.70, Lynas Corp advanced 8.5% to $2.10 and Independence Group closed at $4.62, up 8.7%.
The major banks also rose, but investors remain cautious given the continuing royal commission. Westpac shares rose 1.4% to $28.16, CBA shares ended 0.6% higher but shares in the NAB and ANZ both fell 1.1%.
Insurers were in the spotlight at the commission this week – Freedom Insurance shares slid 21% to 9 cents and Clearview shares eased 3% to 97 cents on Friday and for the week. IAG shares were up 0.3% over the week and Suncorp rose 1%. AMP shares rose 2.5% and QBE shares added 1%.
And shares in aged care companies were rocky thanks to the looming royal commission. Estia Health shares lost 18.3% at $2.41, Japara Healthcare shares fell 17.9% to $1.38 and Regis Healthcare shares fell 18% to $2.97.
Retirement village owner and operator Aveo Group shares lost 7.2% to $2.06.
