Investors have enjoyed a fifth consecutive week of gains on the share market, but returns are becoming limited and a climbing Aussie dollar could pose trouble.

The S&P/ASX200 benchmark index closed higher by 18.8 points, or 0.28 per cent, to 6634.1 on Friday, after mixed results in US trade.

Financials was the best sector, up 0.83 per cent. Materials gained 0.38 per cent after being lower for most of the session in the wake of Thursday’s surge.

The All Ordinaries closed better by 18.0 points, or 0.26 per cent, to 6865.3.

In a week in which Australia emerged from its first recession in nearly 30 years, the ASX200 climbed 0.5 per cent.

The index is close to the figure it started the year on, 6684.07.

Optimism for coronavirus vaccines in the US and Europe have been tempered by record infections, deaths and a slowing US economy.

The United Kingdom became the first country to approve Pfizer’s vaccine this week, while the US aims to approve two before Christmas.

Meanwhile, Australia’s economic recovery appears on course after it emerged from recession on Wednesday. National accounts data showed the economy grew by 3.3 per cent in the September quarter.

Chinese steel-makers’ strong demand for iron ore is also helping.

National Australia Bank foreign exchange head Ray Attrill agreed these factors had further helped the Aussie dollar, which climbed above 74 US cents this week.

Mr Attrill said the US dollar had been under pressure since news of promising coronavirus vaccine developments early last month.

The promise of a resurgent global economy helped risk sentiment, Mr Attrill said.

This is not ideal for the US currency, usually regarded as a safe haven.

“So news for global growth tends to be good for Australia and commodities,” Mr Attrill said, noting Australia’s iron ore boom.

Yet this momentum could create problems for exporters.

“If the Australian dollar continues to strengthen, there will be a question of ‘Is it a negative for Australia’s economy?'” Mr Atrill said.

AMP Capital chief economist Shane Oliver said the Reserve Bank might try to slow the Aussie’s ascent but would be unlikely to stop it.

Both men believed the dollar would rise close to 80 US cents next year.

The rising dollar did not hurt bank shares.

Bendigo Bank climbed 3.01 per cent to $9.24, Macquarie Bank gained 2.32 per cent to $141.82. The best of the big four was ANZ, up 1.26 per cent to $23.30.

Premier Investments chairman Solomon Lew hit back at shareholders who voted against executive pay and served a “first strike” on the board.

More than 48 per cent of shareholders voted against, but Mr Lew said management delivered record results.

Mr Lew chose not to vote on the pay deal, and said if he had the strike would not have been recorded.

Shares closed higher by 0.74 per cent to $23.00.

Miners were mixed. BHP gained 0.61 per cent to $41.50, Fortescue slipped 0.19 per cent to $20.61 after a share price record on Thursday, while Rio was up 0.89 per cent to $113.20.

Next week will begin with Reserve Bank governor Philip Lowe speaking to the Australian Payments Network about innovation and regulation.

The Bank of Queensland will have its annual general meeting on Tuesday, while Westpac will have its AGM on Friday.

The Aussie dollar was buying 74.32 US cents at 1724 AEDT, higher from 74.08 US cents at Thursday’s close.


* The S&P/ASX200 benchmark index closed higher by 18.8 points, or 0.28 per cent, to 6634.1 on Friday.

* The All Ordinaries closed better by 18.0 points, or 0.26 per cent, to 6865.3.

* At 1724 AEDT, the SPI200 futures index was even at 6640.


One Australian dollar buys:

* 74.32 US cents, from 74.08 cents on Thursday

* 77.20 Japanese yen, from 77.45 yen

* 61.14 Euro cents, from 61.18 cents

* 55.24 British pence, from 55.39 pence

* 105.17 NZ cents, from 104.94 cents.