Weekly wrap: miners bounce back as market extends rally
WEEKLY MARKET REPORT
A top performance by mining, real estate and technology companies on Friday helped to propel the Australian share market to its biggest weekly gain in a month.
With fears about severe tariffs for China starting to diminish, investors were rushing back into sold down mining stocks.
That helped to propel the ASX 200 index up 0.5% to extend Thursday’s rally and add 38.6 points to hit a record high close of 8532.3 points.
Over the past week the index has gained 1.5% with stronger expectations that the Reserve Bank will cut interest rates in February helping to push shares higher.
Lower tariff hopes buoy miners
After US President Donald Trump reiterated plans to impose a 25% tariff on Canada and Mexico as soon as Saturday but stayed vague on tariffs for China, the good news saw BHP (ASX: BHP) shares up 1.2% to $39.95.
The good news was also reflected in higher share prices for Rio Tinto (ASX: RIO), up 0.3% to $117.40 while Fortescue (ASX: FMG) shares lost 1c to $19.13.
A rise in the gold price to a record high of US$2796 an ounce saw Newmont (ASX: NEM) shares rise 3.8% to $69.20, De Grey Mining (ASX: DEG) shares rise 3.3% to $2.01 and Bellevue Gold (ASX: BGL) shares up 3.7% to $1.25.
Technology shares also took a leaf out of the rising Nasdaq with Xero (ASX: XRO) shares rising 2.5% to hit a record $183.27 as a great example.
Property trusts were also rising on the back of hopefully imminent interest rate cuts with the best example probably Goodman Group (ASX: GMG) which rose 1.4% to $36.45.
Two weak spots
Only two sectors were weaker, utilities and communication services, with a 1% fall in Telstra (ASX: TLS) shares weighing the telcos down and a 6.7% dive in Origin (ASX: ORG) shares hitting the utilities after a disappointing earnings report.
There were some interesting stock specific moves with shares in Simonds Group (ASX: SIO) rallying 33% after the company agreed to pay $10 million to buy Melbourne-based Dennis Family Homes.
PointsBet (ASX: PBH) shares tumbled 12.8% after a weaker quarterly performance led to a downward revision to annual profit,
Lendlease (ASX: LLC) jumped 2% after it announced the sale of Capella Capital to Sojitz Corporation for $235 million as the company continues to simplify its structure.
Fund manager Magellan (ASX: MFG) saw its shares continue to drop, down another 8% after it continued to lose and reshuffle staff.
Ramsay Health Care (ASX: RHC) shares also shed 0.5% after Australia chief executive Carmel Monaghan announced she would retire in the middle of the year.
Small cap stock action
The Small Ords index rose 1% for the week to close at 3234.0 points.
ASX 200 vs Small Ords
The week ahead
We are in for a few announcements this week in Australia, starting with updates on home prices and retail spending on Monday.
Nationally, home prices are expected to fall marginally in January while retail spending should have risen by about 0.5% in December.
The Bank of England is widely expected to cut interest rates on Thursday and US employment figures will show if the world’s biggest economy is continuing to create jobs.
Individual company share price moves will also abound as both US and Australian companies continue to report their profits.