The Australian share market has made solid gains after a strong lineup of company earnings results briefly drove stocks above 6,000 points on Friday before closing just shy of the mark and up 1.6 per cent for the week.
The benchmark S&P/ASX200 index closed up 48.9 points, or 0.82 per cent, at 5,999.8 points, with a share price dip on Woolworths – despite a bumper first-half result – more than offset by a steady flow of positive local earnings.
Citi director of equities sales Karen Jorritsma said with the market again challenging 6000 points, the consensus is that the recent local volatility was a correction and not a collapse.
“Over a third of earnings results have been better than expected, which tells you conditions are good,” Ms Jorritsma said.
Gains were led by the major banks and health stocks, plus a rebound in energy and mining shares.
The Commonwealth Bank closed the highest of the big four, 1.1 per cent stronger at $75.46 after saying it rejecting 89 of the 100 expanded claims brought against it by the anti-money laundering regulator.
ANZ, National Australia Bank and Westpac all finished 0.9 per cent higher.
With global oil prices at two-week highs, Woodside Petroleum, Oil Search and Origin Energy lifted 0.5 per cent, 0.7 per cent and 0.8 per cent respectively.
The materials sector lifted 1.5 per cent, BHP Billiton climbing 1.6 per cent and Rio Tinto up 0.9 per cent, both shaded by the BHP spinoff South 32 which jumped 6.7 per cent.
Woolworths reported a first-half 38 per cent jump in net profit off the back of booming supermarket sales that outstripped rival Coles.
Ms Jorritsma said however, that Woolworths disappointed investors relative to expectations and was followed by a subsequent migration into Wesfarmers.
“Wesfarmers is regarded as better value,” Ms Jorritsma said.
Woolworths ended 2.6 per cent lower at $26.92 and Wesfarmers climbed 1.6 per cent to $42.53
Generic drugs supplier Mayne Pharma jumped 10.7 per cent to 77.5 cents despite slipping to a net half-year loss of $174.2 million, with the company indicating a stronger second half was on the way with improved trading momentum.
Accent Group shares climbed 18.5 per cent to $1.055 – their highest level in a year – after the owner of The Athlete’s Foot and Platypus footwear chains lifted first-half profit almost 20 per cent thanks to a 16.5 per cent jump in sales.
Southern Cross shares fell 9.7 per cent to $1.07 after the media company’s half-year net profit dropped 21.2 per cent in a result weighed on by the divestment of its northern NSW TV business – a move that ate into revenue.
The Australian dollar is steady against a softening US dollar, weakened by dovish interest rate commentary from a US Federal Reserve official.
At 1700 AEDT, the local currency was trading at 78.24 US cents, from 78.08 on Thursday.
ON THE ASX:
* The benchmark S&P/ASX200 index closed up 48.9 points, or 0.82 per cent, at 5,999.8
* The broader All Ordinaries index ended up 47.5 points, or 0.78 per cent, at 6,105.2 points
* The SPI200 futures contract was up 59 points, or one per cent, at 5,973.0 points.
* National turnover was 3.1 billion securities traded worth $8.1 billion
CURRENCY SNAPSHOT AT 1700 AEDT:
One Australian dollar buys:
* 78.24 US cents, from 78.08 on Thursday
* 83.6995 Japanese yen, from 83.90 yen
* 63.60 euro cents, from 63.61 euro cents
* 56.12 British pence, from 56.15 pence
* 107.22 NZ cents, from 106.70 cents
The spot price of gold in Sydney at 1700 AEDT was $US1,327.50 per fine ounce, from $US1,323.44 per fine ounce on Thursday.
BOND SNAPSHOT AT 1630 AEDT:
* CGS 4.50 per cent April 2020, 1.9727pct, from 2.001pct
* CGS 4.75pct April 2027, 2.7825pct, from 2.816pct
Sydney Futures Exchange prices:
* March 2018 10-year bond futures contract at 97.165 (implying a yield of 2.835pct), from 97.135 (2.865pct) on Thursday
* March 2018 3-year bond futures contract at 97.90 (2.115pct), from 97.870 (2.130pct).
(*Bond market closes taken at 1630 AEDT previous local session; currency closes taken from 1700 AEDT previous local session)