Weekly Wrap: ASX 200 Dips After Commonwealth Bank Selloff, Iron Miners Shine
No sooner had the Australian share market surged 0.6% towards record highs on Friday than it wilted under the pressure of a selloff in Commonwealth Bank shares.
In early trade, the ASX 200 zoomed up as much as 0.6% before investors abruptly decided to take profits after enjoying a massive and enduring rally in the value of Commonwealth Bank shares.
By the close of trade on Friday the ASX 200 had moved through the range of a significant 1% on the day, up 0.6% before closing down 36.6 points, or 0.4% to 8514.2 points.
Eight of the 11 market sectors fell with the real sector hero being materials as money moved out of the buoyant banking sector and into the relatively beaten down miners.
Iron miners rebound strongly
Rio Tinto (ASX: RIO) was the real hero, with its shares surging an impressive 4.6% or $4.78 to reach $108.97 as iron ore futures in Singapore jumped 1.4% to US$94.60 a tonne.
Its larger Pilbara neighbour BHP (ASX: BHP) wasn’t far behind, with its shares adding 3.9% or $1.41 to $37.53, while the third force in iron ore, Fortescue (ASX: FMG), was far from disgraced, adding 3.5% or 53c to $15.46.
Banking tanking
It was an inverse picture for the big banks as Commonwealth Bank (ASX: CBA) finally had a pause, falling 2.8% to $185.36, with shares in its smaller competitors ANZ (ASX: ANZ), National Australia Bank (ASX: NAB), and Westpac (ASX: WBC), all falling almost 2%.
This leaves the market delicately poised to either push for a last gasp record to end the financial year on Monday or to hit pause and wait for the flood of renewed interest that normally comes with the new financial year.
It should also be remembered that despite the last-minute wilt on Friday, the ASX 200 was still up 0.1% for the week and it would not take much of an offshore lead to reach record territory.
Uneasy peace brings cheaper oil
With the Middle East conflict seemingly reaching an uneasy impasse, obviously news from that quarter could swing wildly in either direction.
Reduced war tensions were certainly causing weakness in some oil stocks, with shares in sector leader Woodside Energy (ASX: WDS) eased 0.6c to $23.72, although takeover moves helped Santos (ASX: STO) jump a further 0.4% to $7.66.
Select stocks remain vulnerable to negative news and that was demonstrated by a hefty 18.7% tumble to $14.12 in shares of plumbing supplier Reece (ASX: REH) after it declared that its earnings for the 2025 financial year were expected to fall in the range of $548 million and $558 million, down from $681 million the year before.
Shares in Woolworths (ASX: WOW), fell 1% to $31.14 after it closed its loss-making MyDeal marketplace just three years after taking it over.
Shareholders in rival Coles (ASX: COL) endured an even bigger fall, as its shares fell 1.7% to $20.82.
The week ahead
From one relatively strong market to another with the coming week expected to show that Australian property prices have risen 0.6% in June alone when Cotality releases its home value index on Tuesday.
There are also some local releases measuring retail trade, inflation, building approvals, and household spending.
Internationally, it’s a fairly quiet week, with the US closing markets on Friday for the Independence Day holiday, although a meeting of European central bankers with outgoing US Federal Reserve chief Jerome Powell could generate some headlines.
Central bankers commiserate
No doubt the other bankers, such as Christine Lagarde and Andrew Bailey, will have some quiet commiserations with Powell, who has tolerated an unprecedented level of abuse from US President Donald Trump, who has called him a “numbskull”, among various other insults for keeping interest rates on hold.
While Trump has done everything bar sacking Powell, it is a tough way to end your term as a central banker when you consider he was first appointed by none other than Trump himself during his first term.