Weekly wrap: market recovers late to finish week level
WEEKLY MARKET REPORT
A Friday recovery in bank shares failed to erase a weekly drop on the Australian share market.
The ASX 200 rose by 0.5%, or 39.5 points, to 8231.2 points on Friday with nine of the index’s 11 sectors in positive territory with banks and technology leading the gains.
That gain wasn’t enough to prevent a 0.1% drop across the week, with disappointing results by Westpac and ANZ leading to softer prices for the banking sector.
UK trade deal boosts optimism
Friday’s recovery followed from a Wall Street rally after the US and United Kingdom reached an initial trade deal that will lead to lower tariffs on British exports to America – including cars, steel and aluminium.
A general 10% tariff will continue to be charged, indicating this could become a baseline tariff for other negotiations.
Over the weekend US Treasury Secretary Scott Bessent is holding talks with Chinese officials in Switzerland, helping to buoy optimism on trade.
Banks mostly rising
That pushed up risk assets such as cryptocurrencies and bank shares were also helped, with Commonwealth Bank (ASX: CBA) rising 0.9% to $167.04 while Macquarie (ASX: MQG) jumped 3.8% to $203.31 after it reported a near 6% rise in its full-year profit.
ANZ (ASX: ANZ) broke the mould by falling 1.4% to $28.98, while NAB (ASX: NAB) rose 0.44% to $36.53 and Westpac (ASX: WBC) rose 2.3% to $31.21.
Energy shares were also higher with sector mainstay Woodside Energy (ASX: WDS) shares up 1.4% to $20.40 on the back of higher oil prices.
While iron ore prices firmed, that didn’t help the big miners much, with BHP (ASX: BHP) down 1% to $37.54, Rio Tinto (ASX: RIO) down 0.9% to $114.98 and Fortescue (ASX: FMG) down 0.1% to $15.96.
Big deal finally over the line
One of the larger recent deals came to a head when CoStar finally bought real estate classifieds platform Domain Holdings for $3 billion after several months of negotiations.
Domain (ASX: DHG) shares, which are majority-owned by Nine Entertainment (ASX: NEC), rose 3.1% to $4.38 while Nine shares jumped 6% to $1.58.
The deal wasn’t as positive for real estate advertising competitor REA Group (ASX: REA) with its shares down 2% to $244.97 despite an 18% jump in commercial revenues in the nine months to March.
Healthcase stocsk Healius (ASX: HLS) paid a big price for trading without its dividend, slumping 25% lower to $1.16.
Shares in Chrysos Corporation (ASX: C79) surged 17.9% to $4.87 after news that its minerals analysis tool will be deployed across Newmont’s (ASX: NEM) global operations.
Small cap stock action
The Small Ords Index rose 3.5% for the week to finish on 3193.5 points.
ASX 200 vs Small Ords
The week ahead
Once again we can expect tariff negotiations to be central to how markets trade in the coming week.
Already it is becoming clearer that at the very least the US will insist on a 10% general tariff, along with deals for other areas with specific countries.
In other words, the world is looking at a more protectionist US even if the worst excesses are ironed out.
China will be the really big fish to land in this respect, with the current massive tariff wall erected by both sides big enough to virtually halt all but the most essential trade from happening.
We can also expect to see some of the tariff caused trade reductions to start showing up in some of the trade statistics soon, with areas like transport and shipping likely to show rapidly declining volumes and rising unemployment.
This week there are several US releases to watch out for, including inflation, retail sales and jobs figures.
The other big factor working on markets are the chances of interest rate moves with the latest speculation having Australia cutting rates at its next meeting on May 20 even as the US Fed refrains from cutting further due to the risks of inflation amid the highly uncertain trade situation.
The world is already splitting up over official interest rates with the United Kingdom cutting last week and central banks in Sweden and Norway indicating that their rates are heading lower to combat the effects of tariffs.