CANBERRA: Australian shares enjoyed a broad-based recovery rally on Friday, thanks to strong gains on Wall Street and firmer commodity prices, pushing the local market into positive territory for the week despite lingering uncertainty over the Greek debt crisis.
On Wall Street the Dow Jones jumped and the Nasdaq Composite set a record intraday high, as traders shrugged off concerns about Greece and focused instead on the Federal Reserve’s dovish stance on interest rates.
The rally sparked gains across most regional markets on Friday, but Chinese shares posted more losses, driving the Shanghai Composite into correction territory. The index was down 5.4 per cent in afternoon trade, on track for a hefty 12.4 weekly loss, amid growing concern the bull market of the past months had driven valuations to unsustainable levels.
Locally, the All Ordinaries was up 1.2 per cent for the day and 0.7 per cent for the week to finish at 5591.5 while the ASX200 rose 1.3 per cent for the day and 0.9 per cent during the week to finish at 5597.0.
The best performing sector for the week was the finance sector, which posted a 2.3 per cent weekly gain. Among the banks, ANZ was 1.2 per cent higher on the day and 3.3 per cent for the week. Commonwealth Bank rose 1.5 per cent for the day and 3.7 per cent for the week, National Australia Bank was up 1.6 per cent on the day and 4.3 per cent for the week, and Westpac lifted 1 per cent on the day and 3.5 per cent for the week.
The banks profited from a number of broker noites out during the week saying the stocks offered value after their recent selloff. It also didn’t hurt that famed US investor Warren Buffett, upon his investment in Insurance Australia Group this week, flagged interest in the local banks.
IAG gained 4.5 per cent for the week to finish at $5.75 after Mr Buffett announced he had purchased, via his company Berkshire Hathaway, $500 million in the insurer and would take on 20 per cent of IAG’s new business.
The telecommunications sector was another strong weekly performer with a 2 per cent lift, mostly on the back of Telstra, which rose 0.6 per cent for the day and 1.6 per cent for the week.
The poorer performing sectors were technology, down 1.7 per cent for the week, and both consumer sectors – staples, down 1 per cent, and discretionary, down 0.5 per cent.
“Woolworths was the focus point, with a change of chief executive and a changed strategy generating mixed responses from investors,” said Suncorp head of treasury research Darryl Conroy. “It notched a slight gain for the week, but the share price ultimately touched a three year low.”
Woolworths rose 1.4 per cent to $27.30, while Coles owner Wesfarmers fell 2.7 per cent to end the week at $40.20.
Mr Conroy said that while market endured an up-and-down week it neverthless managed to outperform most of its Asian peers – particularly the volatile Chinese Shanghai Index.
“The ASX200 has yet to reclaim the six straight declines seen earlier this month and does appear to be finding some resistance at around 5600,” said Mr Conroy. “The end of financial year is less than two weeks away which should see plenty of activity and provide a bit of window dressing. A data-light week next week is likely to see the market’s focus on international trends, especially news and developments surrounding Greece.”
Iron ore, gold and oil prices all rallied Thursday night, pushing commodity stocks higher. BHP gained 1.6 per cent on the day and 1.8 per cent for the week to close at $28.41 and Rio Tinto climbed 1.1 per cent for the day – but slipped 2.8 per cent for the week – to close at $55.55.
APN News & Media gained 5.1 per cent for the day and for the week after the announcement that chief executive Michael Miller will step down from his current role and move to News Corp as executive chairman for Australasia.
To take the place of Mr Miller at APN, the company has appointed Ciaran Davies – currently chief executive of its Australian Radio Network – as chief executive.
Sydney Airport shares rose 2 per cent for the day – but declined 1.5 per cent for the week – after the company said its total passenger traffic for May rose 1.6 per cent from a year earlier.
Nickel producer Western Areas jumped 4.7 per cent for the day and 1.3 per cent for the week after it announced the purchase of Glencore’s Cosmos nickel complex in Western Australia in a $24 million deal.
Western Areas said the acquisition would provide the company with additional exploration opportunities and a potential second mining operation alongside its Forrestania nickel operation in southern WA.
