THE sharemarket lost its fizz on Friday but still managed to chalk up record highs on two out of five days this week as surging prices for base metals and gold put a rocket under resource stocks.
Gold hit a 26-year high after breaking through the psychologically important $US700 an ounce barrier earlier in the week, while the prices for base metals such as copper, nickel and zinc traded at near record highs.
Investors also had reason to cheer the flow-on effects on consumer spending of tax cuts announced in the federal budget, which gave retailing stocks a welcome boost after months of tough trading conditions.
The benchmark ASX 200 index fell 35 points to 5329.5 on Friday, but was up 74 points, or 1.4 per cent, over the week. The broader All Ordinaries dropped 32.7 points to 5285.5 on the day, but rose 76 points over the five trading days.
CMC Markets senior dealer James Foulsham said resource stocks shone through once again this week, thanks to soaring prices for gold and the base metals.
"More than anything the market is still being dominated by commodities and … that is what people are going to continue to look towards," he said.
"Six months ago people were saying this market is set for a correction, but if you keep seeing commodity prices getting stronger, there is no reason why the Aussie market can't keep going up."
Transport group Toll Holdings was one of the biggest winners of the week after it gained control of Patrick Corp, bringing to an end one of the country's most acrimonious takeover battles. Toll fell 8c to $15.33 on Friday but soared 17 per cent over the week.
Among the biggest losers was DCA, which was savaged by investors after it warned earnings for the second half would be lower than hoped. The country's biggest owner of X-ray centres plummeted almost 19 per cent, or 72c, to $3.08 on Friday.
Colonial First State's head of investment markets research, Hans Kunnen, said the changes announced in the budget had stimulated the retail and financial sectors.
"It was unambiguously positive for retailers and financials, particularly wealth management," he said. "It's been a stunning week."
Wealth management stocks benefited from the announcement that taxes on superannuation pensions and payouts for people 60 and over would be s cr apped.
AMP fell 5c to $9.71 on Friday, but was up 3 per cent over the week, while AXA Asia Pacific dropped 14c to $6.60 on the day, but was up 22c over the five days.
Among retailers, Just Group gained more than 9 per cent over the week, but dipped 3c at $3.47 on Friday. David Jones also fell 3c on the day to $2.78, but was up almost 7 per cent over the five days.
