Source : THE AGE NEWS
By Angus Delaney
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket closed higher on Friday supported by respectable company results and optimism for global stability after US President Donald Trump inked a trade deal with Britain.
The S&P/ASX 200 closed up on Friday, gaining 39.5 points or 0.5 per cent, at 8231.20 with nine out of 11 sectors improving. The Australian dollar finished the week slightly lower against the greenback to buy US63.97¢, down from US64.10¢ on Thursday at 5pm.
The lifters
Information Technology was the best performing sector of the day with a 1.8 per cent increase, followed by financials, which edged 1.1 per cent higher.
Accounting software maker Xero (up 2.7 per cent) and NextDC (up 2.7 per cent) performed well, as did WiseTech (1.1 per cent higher).
REA Group and Domain.Credit:
Macquarie Group was among the best performing financial stocks (up 3.8 per cent), followed by QBE Insurance (up 3.5 per cent). Macquarie’s bump follows better than expected results released on Friday with a 5 per cent lift in full-year profits to $3.72 billion, helped by a strong performance in its flagship asset management business. Analysts had predicted a $3.69 billion profit.
Westpac led the big four with a 2.3 per cent gain to $31.21 after selling off for most of the week, with 6.9 per cent wiped from its market cap since last Friday.
Nine Entertainment, owner of this masthead, surged 6 per cent after US real estate listings giant CoStar confirmed a $3 billion deal to buy its majority-owned property listings business Domain, raising the prospect of a special payout to shareholders.
News Corp gained 4.8 per cent after it reported better-than-expected results.
The laggards
While the other three big banks ended the day higher, ANZ fell 1.4 per cent at market close. The materials sector slipped 0.5 per cent as BHP and Rio Tinto fell 1 per cent.
Real estate was the only other sector to fall – by 0.01 per cent. CoStar’s planned aquisition of real estate advertiser Domain prompted its main competitor, REA Group, to lose 2 per cent.
Stockland (down 1.9 per cent) and GPT (down 1 per cent) were among the shares to decline.
The lowdown
The Australian sharemarket has finished the week basically flat, with investors wary ahead of the first round of US-China tariff talks.
“The market has been largely flat over the course of the week, but it does follow the best week that we’ve had in over a year,” said CommSec market analyst Steven Daghlian.
“But I think investors are bracing themselves for what happens over the coming days when … US and Chinese negotiators will meet in Switzerland to discuss tariffs and trade agreements.”
British Prime Minister Keir Starmer and President Donald Trump making their trade deal.Credit: AP
Overnight, Trump signed a trade with Britain that scrapped tariffs on UK steel, aluminium and autos and created optimism for other countries that they could receive similar concessions and increased confidence in global sharemarkets.
However, the 10 per cent baseline tariff was not lifted. Although British Prime Minister Keir Starmer called it a historic agreement between the two countries, the UK remains worse off than before “Liberation Day”.
AMP’s Shane Oliver said it was still too early to tell if the sharemarkets could bottom out again under Trump’s influence and also that a similar deal wouldn’t benefit Australia as it had the UK.
“The US/UK deal suggests that the best Australia might hope for is relief on the 25 per cent tariff on steel and aluminium, and any future tariff on pharmaceuticals, but the 10 per cent tariff will remain,” Oliver said.
“So there is little point Australia giving anything up to the US, like easier biosecurity or social media laws.”
Most traded shares on IG Markets.Credit: IG Markets
Meanwhile, CoStar’s purchase of Domain could “definitely” affect REA’s dominance in real estate advertising, said Adam Dawes, senior investment adviser at Shaw and Partners.
Domain has a current share price of $4.40, while REA trades at $244.9 a share.
“They’re [CoStar] going to put millions into Domain to try and take it from No. 2 to No. 1,” Dawes said.
Next week, all eyes will be on what, if any, outcome arises from US-China trade talks, while US inflation data later in the week also has market-moving potential.
With the Reserve Bank’s next meeting less than two weeks away, Australian jobs data on Thursday could provide the last obstacle to a widely expected interest rate cut.
“This is the type of data that could still maybe put just a little bit of doubt in the market’s mind,” CommSec’s Daghlian said.
“Especially if we get a very strong outcome or surprising numbers on the jobs front next week.”
Tweet of the day
Quote of the day
‘The question you should be asking is: is it better than where we were yesterday?’
How UK Prime Minister Keir Starmer replied when asked if the outcome of his trade deal with the US was better than the status quo between the two countries six months ago, before Trump was elected.
With AAP, Bloomberg
