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The Australian sharemarket recovered from a slow start to finish 0.3 per cent higher on Friday, with a rotation into the market’s heavyweight banking and mining names lifting the ASX200 to its first weekly gain in three.
The benchmark index closed 0.8 per cent higher for the week at 7080.8, just short of the 14-month peak it set on Wednesday.
The banks and miners closed out a strong week as investors continued to cycle out of growth sectors such as technology and health. Commonwealth Bank touched a new record high $94 and closed 1.1 per cent higher at $93.92.
Eagle Asset Management chief investment officer Sean Sequeira said the rotation into the more heavyweight sectors of the Australian market comes as investors grow increasingly bullish on the strength of the nation’s economic rebound.
The Australian sharemarket recovered from a slow start to gain 0.3 per cent on Friday, lifting the ASX200 to its first weekly gain in three.
The benchmark index closed 0.8 per cent higher for the week at 7080.8, just short of the 14-month peak set on Wednesday.
The banks and miners were strong on Friday as investors continued to cycle out of growth sectors such as technology and health. Commonwealth Bank touched a new record high $94 and closed 1.1 per cent higher at $93.92.
Record iron ore prices above $US200 a tonne helped BHP, Rio Tinto, and Fortescue Metals gain, while gold miners were also strong as the precious metal moved to near three-months highs above $US1800 an ounce.
Macquarie Group chief executive Shemara Wikramanayake says Australia is trailing the world on electric vehicles after the investment powerhouse reported a record full-year profit and outlined a bold plan to accelerate its push into green financing.
Ms Wikramanayake said Australia was at an earlier stage than other markets on the transition to electric vehicles and called on industries with large transportation fleets, such as the mining sector, to convert.
“That might help to give scale to underwrite the transition,” Ms Wikramanayake said. “The whole world has a big mountain to climb there in electrification of transport but yes we need to do a lot in Australia.”
Macquarie reported full-year profits reached record highs after growing by 10 per cent over the year to $3 billion and committed to paying shareholders a franked final dividend of $3.35 per share – up from $1.80 a year ago.
The ASX200 was up 0.3 per cent at 7079.3 with 15 minutes left in the session.
If it holds its current trajectory, the market will close 0.8 ahead for the week, snapping two consecutive weeks of losses.
The market touched a high of 7101.2 today with the miners, banks and energy firms doing well.
Healthcare and tech stocks drooped.
US futures were pointing to gains on Wall Street tonight, with the S&P500 and Dow E-mini up 0.1 per cent, and the Nasdaq gaining 0.3 per cent.
Home lenders and real estate agents are tipping the extraordinary boom in house prices to persist for the rest of the year despite signs buyers are becoming more cautious about overpaying for properties.
REA Group chief executive Owen Wilson says the boom conditions in the real estate market are expected to continue through the rest of this year despite signs that buyers are becoming more cautious about overpaying for properties.
“What we’re seeing is one of those rare markets where it’s a good time to sell, and it’s a good time to buy,” Mr Wilson said after the release of REA’s third quarter results which benefited from the strong market conditions.
While rising prices are giving sellers confidence that they will get a good price for their properties, record low interest rates and rising consumer confidence - which will be buttressed by government plans to push down unemployment - are helping to sooth buyer concerns, according to Mr Wilson.
The US central bank’s Financial Stability Report, released on Thursday (US time), came after an unusual six months for markets. Over that period, stocks climbed steadily as the US economic outlook rebounded, and stories of excess began to crop up.
Internet discussion boards helped to fuel interest in stocks such as GameStop, a cryptocurrency first created as a joke has run-up in value, and a little-known hedge fund melted down. These stories have captured headlines and caused many — including, evidently, some at the Fed — to ask whether the financial system was headed for problems.
“Vulnerabilities associated with elevated risk appetite are rising,” Lael Brainard, a Fed governor, said in a statement accompanying the Fed’s release. Stock prices are high compared with earnings and “the appetite for risk has increased broadly, as the ‘meme stock’ episode demonstrated.”
The report painted a generally sunny picture in which banks, consumers and businesses have weathered the coronavirus shock in decent financial shape, and it said that by some measures, risk appetite looked typical.
The Australian sharemarket’s high-growth sectors continue to lose heat, with the ASX200 technology sector down 2 per cent on Friday, and healthcare stocks losing a collective 0.8 per cent.
Growth has faltered lately as investors cycle into value and anything that is positioned to do well from the ongoing economic recovery and reopening trade.
There are likely lingering concerns among investors that a rapidly improving economy will also lead to an interest rate rise sooner than hoped, in order to curb inflation.
It is this very theme that has seen the tech-heavy Nasdaq suffer this week.
Skincare and makeup retailer Adore Beauty has clawed back some of Thursday’s heavy losses, rising 10 per cent from a record low and back above $4.
The newly-listed firm sank by nearly 20 per cent to $3.70 on Thursday after a third-quarter trading update left investors unimpressed.
In its update, the company said active customers - those who have made a purchase in the last 12 months - were up by 69 per cent on the same time last year at 687,000.
This is down from the 770,000 active customers the firm said it had at the end of December.
Opinion
The economy’s rebound from the lockdowns of last year has been truly remarkable – far better than anyone dared to hope. Even so, it’s not quite as miraculous as it looks.
As Tuesday’s budget leads us to focus on the outlook for the economy in the coming financial year, it’s important to remember that the coronacession hasn’t been like a normal recession. And the recovery from it won’t be like a normal recovery either.
The coronacession is unique for several reasons. The first is that the blow to economic activity – real gross domestic product - was much greater than we’ve experienced in any recession since World War II and almost wholly contained within a single quarter.