Weekly wrap: Market clings to weekly rise but can’t quite hold 9000 points
The Australian share market continued its strong performance to grab a third weekly rise but couldn’t quite cling to the 9000-point barrier on Friday after smashing through it on Thursday.
A series of strong corporate results during the week pushed the ASX 200 above 9000 points for the first time, but some profit-taking on Friday allowed the index to slip below that record high water mark.
For the week the ASX200 index rose 0.3% for a final Friday close of 8967.40 points.
The 51.7 point loss on Friday came on top of seven of the 11 market index sectors closing lower.
The Friday fall came despite an encouraging reporting season so far, which has seen around 40% of stocks upgraded by brokers while around 10% have been downgraded, although there is still a long way to go until all of the profits have been released.
Inghams chickens out
Particularly weak on Friday was the consumer staples sector, hit hard as chicken company Ingham’s Group (ASX: ING), which saw its shares crunched by 20.3% to $2.83 on the back of a weak outlook and after full-year net profit fell 10.2% to a disappointing $90 million.
The healthcare sector was also lower on the back of a continuing fall by biotech giant CSL (ASX: CSL) after its shares fell another 4.2% to $216.60.
CSL shares fell almost 20% for the week after disappointing earnings started the slump on Tuesday.
The traditional barometers for the Australian market — the banks and the big mining companies — were mixed, not adding a lot of direction to the market.
For the miners both Rio Tinto (ASX: RIO) and Fortescue (ASX: FMG) were down a little more than 1% while BHP (ASX: BHP) was down marginally by 0.1%.
Among the big banks, Commonwealth (ASX: CBA) and ANZ (ASX: ANZ) were both slightly lower, while National Australia Bank (ASX: NAB), Westpac (ASX: WBC) and Macquarie (ASX: MQG) were all slightly higher, continuing the mixed signals coming from the sector.
There was no solace to be had among fast food shares either, with burrito vendor Guzman y Gomez (ASX: GYG) being crunched by 18.2% to just $23.70 after investors were disappointed by both the outlook and the company’s profit results.
James Hardie recovery begins
It wasn’t all bad news as shares in James Hardie (ASX: JHX) started to recover, up 5.2% to $30.50 after its shares had been thumped by more than 30% over the past two sessions.
Despite tough industry conditions, mortgage insurer insurer Helia (ASX: HLI) saw its shares rise by 1.8% to $5.73 after the company announced an 8% jump in net profit and reiterated warnings of a tough outlook for the building industry.
Zip up strongly
One of the more impressive of the rising stocks was shares in Buy now, pay later operator Zip (ASX: ZIP), which jumped a creditable 20.2% to $3.75 after it moved closer to considering a second listing of its shares on the Nasdaq exchange due to considerable interest from US investors.
Shares in Accent Group (ASX: AX1) fell a precipitous 17.8% to $1.36, mainly due to current trading falling below market expectations, despite a reasonable performance in the 2024-5 financial year.
Nervousness preceding next week’s results by supermarket giant Coles (ASX: COL) saw its shares fall by 3.3% to $20.85.
The bad news for shareholders in fertility company Monash IVF (ASX: MVF) also continued, with its shares falling 13.7% to 69.5¢ after it reported a forecast fall of 8.1% in its underlying net profit to $27.4 million for the 2024/25 financial year.
The week ahead
The coming week is a massive one for company profits in Australia, with around 175 companies reporting.
That means analysts will be able to compose a much fuller picture of how companies are performing both here and in the US, which will go through their final week of results.
So far, the corporate sector in both countries has been performing quite well but sometimes there can be some bad news left until closer to the end of the reporting season.
Inflation and interest rates coming into focus
Other than company results, the big things to watch out for in Australia are establishing a clearer picture on the outlook for inflation and interest rates.
The monthly consumer price index (CPI) is out on Wednesday and should rise slightly, courtesy of rising prices for essentials including electricity, housing, food, and clothing.
The minutes of the August RBA board meeting are also released, which could give us some idea of whether the 25-basis-point cut announced then will be repeated any time soon.
Construction, business investment, and private sector credit figures should help to fine-tune the economic picture in Australia as well.