The Australian share market has closed barely higher, falling back from a surge on Friday in the wake of Scott Morrison’s selection as the nation’s next prime minister.
After a rollercoaster day the benchmark S&P/ASX200 closed a slim 2.9 points, or 0.05 per cent, higher at 6,247.3 points, while the broader All Ordinaries was down 2.4 points, or 0.04 per cent, lower at 6,357.9 points.
The Australian dollar has been buoyed by the resolution of political uncertainty and was at 72.84 US cents at 1700 AEST, down from 72.96 on Thursday but recovered from an intra-day low around 72.39 US cents.
A week of turmoil in Canberra, as now-former Prime Minister Malcolm Turnbull overcame an early challenge from Peter Dutton only to fall in a party room vote on Friday, overshadowed the busiest week of reporting season and weighed on investor sentiment.
The S&P/ASX200 ended the week down 1.5 per cent.
Commsec market analyst James Tao said the eventual change of prime minister ended a week of uncertainty and allowed the share market and the Aussie dollar to recover.
“(The dollar) hit its lows right as the Liberal party was meeting and once it was announced that Scott Morrison was ahead and the new leader, the Aussie dollar jumped,” he said.
AMP Capital chief economist Shane Oliver said Mr Morrison – a centrist – was more market-friendly than his conservative contender Mr Dutton.
“This is a reasonably good outcome from an economic and investment perspective,” Mr Oliver said.
JP Morgan chief economist Sally Auld said markets responded positively to Mr Morrison because he is a known quantity “and is generally viewed as having performed well in the portfolio (of treasurer)”.
“Policy changes under a Morrison government are likely to be minimal (and) it is likely Morrison will preserve the ambition to return the budget to surplus,” Ms Auld said.
On the ASX the market was supported by health stocks with CSL rising 2.9 per cent to to a new record of $224.43, while Mayne Pharma Group hit a near-18-month peak of $1.11, up 5.7 per cent after showing improved second-half trading in its full-year results.
Westpac weighed on the market after it announced in a third-quarter update that its net interest margin is down about 11 basis points due mostly to higher funding costs.
Westpac lost 69 cents, or 2.4 per cent, to close at $27.66 and CBA was the only big four bank to cling to positive territory, up 0.2 per cent at $70.89.
In company results Medibank Private dropped 2.2 per cent to $3.10 after posting a one per cent fall in annual net profit and flagging a flat outlook for insurance market growth.
Brambles hit a 20-month high, up 6.4 per cent to $10.60, after showing a lift in underlying full-year profit and announcing the demerger and possible sale of its IFCO reusable plastic containers business.
Star Entertainment Group added 30 cents, or six per cent, to $5.30 after its full-year normalised results were swelled by returning Chinese high rollers.
ON THE ASX:
* The S&P/ASX200 closed up 2.9 points, or 0.05 per cent, at 6,247.3 points
* The All Ordinaries was down 2.4 points, or 0.04 per cent, at 6,357.9 points
* In futures trading the SPI200 index was flat at 6,221 points
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 72.84 US cents, from 72.96 US cents on Thursday
* 81.084 Japanese yen, from 80.869
* 62.95 euro cents, from 63.09
* 56.77 British pence, from 56.66
* 109.49 NZ cents, from 109.27
The spot price of gold in Sydney at 1700 AEST was $US1,189.41 per fine ounce, down from $US1,190.33 per fine ounce on Thursday.