The Australian share market has broken a three-day losing streak as some buyers returned to the market despite negative overseas leads, however volumes were muted with no strong theme directing trading.
The benchmark S&P/ASX200 index finished the day up 26.7 points, or 0.47 per cent, at 5,682.1 points, after bottoming out on Thursday to levels not seen since February. Gains among financial, energy, healthcare telcos and utilities stocks offset loses in the materials, industrials and gold sectors.
CMC Markets chief market strategist Michael McCarthy said the local bourse had been contrarian for much of the week.
"It's a bit surprising the Australian market performance today, particularly given the pressure that we've seen on the broader index over the course of this week," Mr McCarthy said.
"For most of this week we've shrugged off positive leads and we've under-performed the region, and that selling has not returned today - in fact, if anything, it appears to have turned to buying."
But Mr McCarthy said trading volumes were light, which did not inspire confidence.
"There doesn't appear to be a coherent investment theme," he said.
The Australian dollar remained below 80 US cents in the wake of lower iron ore prices, speculation of a looming US interest rate hike, and less hawkish comments from Reserve Bank of Australia governor Phillip Lowe on Thursday.
At 1630 AEST the Aussie was at 79.39 US cents, from 79.59 US cents on Thursday.
The refocus on potential rate hikes coincided with a turnaround for the big four banks.
ANZ lifted 0.6 per cent to $29.94, Westpac gained 1.2 per cent to $31.64, and National Australia Bank improved 0.9 per cent to $31.28.
Commonwealth Bank rose 0.7 per cent to $76.62.
Commonwealth Bank could launch a share buyback in the next financial year to redistribute capital raised by the sale of its life insurance and global asset management businesses, according to a report released by UBS analysts.
In the resources sector, Rio Tinto ascended 0.7 per cent to $65.97.
Rio Tinto announced it will return proceeds from the recent $US2.7 billion sale of its NSW coal operations to shareholders through a share buyback.
Global miner BHP Billiton eased 0.2 per cent to $25.95 as ratings agency Fitch has warned that BHP Billiton's plan to divest shale gas assets combined with any increased level of shareholder payouts could impact its credit profile.
Iron ore play Fortescue Metals descended one per cent to $5.12, after the price of iron oredropped $US3.50 to $US64.75 a tonne.
Among other stocks, regional broadcaster Prime Media plunged 5.5 cents, or 11.6 per cent, to 42 cents, and Seven West Media advanced 1.5 cents, or 2.1 per cent, to 72.5 cents.
Talks between Seven West and Prime over combining their assets into a single media company have ended with the two unable to come to an agreement, the companies said on Friday.
ON THE ASX:
* The benchmark S&P/ASX200 closed up 26.7 points, or 0.47 per cent, at 5,682.1 points.
* The broader All Ordinaries index was up 23.9 points, or 0.42 per cent, at 5,740.6 points.
* The SPI200 futures contract was up 29 points, or 0.51 per cent, at 5,671 points.
* National turnover was 2.5 billion securities traded worth $4.9 billion.
CURRENCY SNAPSHOT AT 1700 AEST:
One Australian dollar buys:
* 79.46 US cents, from 79.59 on Thursday
* 88.907 Japanese yen, from 89.66 yen
* 66.39 euro cents, from 66.91 euro cents
* 58.55 British pence, from 58.92 pence
* 108.83 NZ cents, from 108.92 cents
GOLD:
The spot price of gold in Sydney at 1700 AEST was $US1,297.67 per fine ounce, from $US1,294.27 per fine ounce on Thursday.
BOND SNAPSHOT AT 1630 AEST:
* CGS 4.50 per cent April 2020, 2.0468pct, from 2.0656pct
* CGS 4.75pct April 2027, 2.7429pct, from 2.7752pct
Sydney Futures Exchange prices:
* December 2017 10-year bond futures contract at 97.175 (implying a yield of 2.825pct), from 97.135 (implying a yield of 2.865pct) on Thursday
* December 2017 3-year bond futures contract at 97.8 (2.19pct), from 97.78 (2.22pct).
(*Bond market closes taken at 1630 AEST previous local session; currency closes taken from 1700 AEST previous local session)
In the U.S., the S&P 500 closed slightly higher on Friday even though Apple was a drag, as worries about Washington’s latest healthcare legislation proposal eased and investors shrugged off concerns about North Korea.
Investors in the broader market were also encouraged by a jump in the Russell 2000 small-cap index, which ended with a record high close.
After a volatile day the S&P’s healthcare sector ended 0.1 percent higher as insurance stocks regained ground after Republican Senator John McCain said he opposed his Republican peers’ latest effort to replace President Barack Obama’s healthcare law.
The S&P technology sector managed to eke out a small gain as investors had more appetite for risk even with a decline of 1 percent in Apple (AAPL.O) shares on muted reactions to the iPhone maker’s latest product launch.
“The removal of the healthcare overhang, the fact the North Korea market impact is dwindling and the move in the Russell 2000 has all the smart investors thinking that the grind higher continues,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
The Dow Jones Industrial Average .DJI fell 9.64 points, or 0.04 percent, to 22,349.59, the S&P 500 .SPX gained 1.62 points, or 0.06 percent, to 2,502.22 and the Nasdaq Composite .IXIC added 4.23 points, or 0.07 percent, to 6,426.92.
Some investors moved to safe-haven assets such as gold, after North Korea said it might test a hydrogen bomb over the Pacific Ocean in response to U.S. President Donald Trump’s threat to destroy the reclusive country.
But others felt that the market would cope with the ongoing stand-off between the countries, which has been ratcheting up in recent months. “If you cry wolf enough it loses its impact in the end,” Antonelli said.
Five of the 11 major S&P sectors ended the day lower and utilities .SPLRCU led the decliners with a 0.7 percent loss. After falling as much as 0.5 percent, the healthcare sector .SPXHC ended 0.08 percent higher.
Earlier in the day concern about the Graham-Cassidy healthcare bill had wreaked havoc with insurers’ stocks. UnitedHealth (UNH.N) closed down 1.1 percent after falling as much as 3.6 percent earlier in the day.
The small telecom services index .SPLRCL, with only four stocks, was the biggest percentage gainer with a 1.4 percent rise on consolidation speculation while the energy index .SPNY rose 0.5 percent as oil futures settled higher. [O/R]
T-Mobile (TMUS.O) gained 1 percent after Reuters reported that the cellphone network operator was close to agreeing tentative terms on a deal to merge with Sprint (S.N), whose shares jumped 6.1 percent.
The report also pushed up bigger rivals Verizon Communications (VZ.N) and AT&T Inc (T.N), which could benefit from having one less competitor.
Advancing issues outnumbered declining ones on the NYSE by a 1.82-to-1 ratio; on Nasdaq, a 1.91-to-1 ratio favored advancers.
About 5.26 billion shares changed hands on U.S. exchanges compared with the 6.03 billion average for the last 20 sessions.
Source: Netwealth Morning Business Roundup
Enjoy Spinach and White Bean Quesadillas with a glass of Refreshing Strawberry Juice for breakfast today. Sorry - no bacon.
