Australian stocks have recovered from a morning slump to end the week on a high but a strong greenback has battered the Aussie dollar.
The benchmark S&P/ASX200 index was up 9.2 points, or 0.15 per cent, to 6185.5 points on Friday, while the broader All Ordinaries index was 7.2 points, or 0.11 per cent, higher at 6301.1 points.
Bell Direct equities analyst Julia Lee said Australian stocks had “bucked the trend” as the only markets in the region finishing in the black on Friday.
Robust US economic data and a surge in Treasury bond yields pushed exposed local stocks higher, particularly in the insurance, healthcare, commodities and IT sector.
“As bond and interest rates rise, it becomes more attractive for companies to park their money in the US,” Ms Lee said.
With the Reserve Bank unlikely to put up interest rates for another year, she predicts the Aussie will keep falling to below US 68 cents – levels last seen during the global financial crisis.
After a small spike following the release of better-than-expected retail data, the Aussie was buying 70.70 US cents at 1630 AEST, down from 70.79 US cents on Thursday.
Retail spending beat market expectations to register a slight rise of 0.3 per cent in August, with department stores posting the biggest gains.
The mining sector pared back earlier gains but was still higher with heavy materials up 0.02 per cent, with BHP eking out the biggest gains, up 0.25 per cent to $35.50.
Copper prices were up again overnight but aluminium retreated as speculators grew nervous about US inflation levels.
Energy shares also turned around, with Santos, Caltex and Oil Search Ltd all up rising between 0.07 and 0.66 per cent.
Oil and gas explorer Beach Energy has announced it will sell 40 per cent of its Victorian Otway assets to Eyal Ofer’s OG Energy for $344 million.
Shares in Beach Energy were down 3.65 per cent to $2.11.
The financial sector also benefited from strong US bonds with three of the big four banks posting small gains after a difficult week dealing with fall-out from the banking royal commission’s interim report.
NAB fell four points, or 0.15 per cent late in the day to close at $27.21 while ANZ had the strongest gains, up 0.4 per cent to $27.72.
Meanwhile, retail giant Wesfarmers moved a step closer to its planned $20 billion demerger of supermarket chain Coles after the Supreme Court of Western Australia gave the nod on Friday for the company to hold a shareholder meeting to vote on the planned spin-off.
Shares Wesfarmers closed up 14 points, or 0.28 per cent, at $49.57.
ON THE ASX:
* The S&P/ASX200 was up 9.2 points, or 0.15 per cent, to 6185.5 points
* The All Ordinaries was 7.2 points, or 0.11 per cent, higher at 6301.1 points
* In futures trading the SPI200 futures index was down three points, or 0.05 per cent, at 6174.0 points at 1630 AEST.
CURRENCY SNAPSHOT AT 1630 AEST:
One Australian dollar buys:
* 70.70 US cents, from 71.78 US cents on Thursday.
* 80.52 Japanese yen, from 80.99
* 61.42 euro cents, from 61.70
* 54.24 British pence, from 54.72
* 109.27 NZ cents, from 109.11
The spot price of gold in Sydney at 1630 AEST was $US1198.939 per fine ounce, up from $US1197.76 on Thursday.