Weekly wrap: supermarket stocks boost market’s best week this year
WEEKLY MARKET REPORT
It’s official – supermarket prices are rising too fast, or at least their share prices are.
After a long-awaited report by the competition regulator which found the big supermarkets some of the most profitable retailers in the world, shareholders reacted by piling into Woolworths (ASX: WOW) and Coles (ASX: COL) shares.
That set up the stage for the share market’s best weekly gain for the year with the ASX200 up 0.2% or 13.2 points to 7932.1 points on Friday.
That took the weekly gain to 1.7%, the first such weekly rise for four weeks.
The share market performance was a bit uneven with six of the 11 sectors higher led of course by consumer staples.
Traders love profitable supermarkets
Traders pushed Woolworths shares up 6.3% to $29.93 while Coles shares leapt 4.9% to $19.46 after the competition regulator fell short of accusing the supermarkets of price gouging.
Shares in alcohol retailer Endeavour Group (ASX: EDV) also climbed by 2%.
It was not all good news with mining stocks falling after US President Donald Trump invoked emergency powers to increase US production of critical minerals to decrease the country’s reliance on China.
Trump fears on coal
Traders believed that could also increase US coal production, with shares in local coal miner Yancoal (ASX: YAL) down 1.9% to $5.20 while shares in fellow coal producer Whitehaven (ASX: WHC) fell 2.8% to $5.72.
It was a bit of a mixed day for the other miners with South32 (ASX: S32) shares falling 2.5% to $3.53 and Pilbara Minerals (ASX: PLS) down 5.1% to $1.85.
Spot iron ore futures in Singapore fell below US$100 a tonne, although shares in BHP (ASX: BHP) rose 1.1% and Rio Tinto (ASX: RIO) shares were up 0.9% while Fortescue Metals (ASX: FMG) shares fell by 0.9%.
Mixed day for banks
It was also a mixed-up sort of day for the banks with Westpac (ASX: WBC) shares down before rallying near the end of the day to add 0.4% while shares in NAB (ASX: NAB) and ANZ (ASX: ANZ) were up by 0.3% and 0.5% respectively.
Australia’s biggest bank, Commonwealth Bank (ASX: CBA), was out on its own with a 0.2% share price fall.
The mood was gloomier for the healthcare and technology sectors, with shares in medical imaging software provider Pro Medicus (ASX: PME) down 6.5% to $223.58 and pharmaceutical giant Sigma Healthcare (ASX: SIG) shares off 1.4% to $2.87.
Paladin down on mine closure
Individual share prices also moved with company announcements with shares in Paladin Energy (ASX: PDN) down 4% to $6.56 after the miner was forced to close its Langer Heinrich Mine in Namibia after heavy rains interrupted access to the mine site.
Emerald Resources (ASX: EMR) shares dropped 3.9% to $4 after quarterly output from its Okvau gold mine missed guidance.
Solomon Lew’s Premier Investments (ASX: PMV) shares jumped by 3.9% to $21.85 after its subsidiary Peter Alexander’s sales hit a record $297.7 million in the first half.
The retailer successfully downplayed its 12.8% fall in interim profit, saying a challenging consumer environment was to blame.
Nine gets closer to backing Domain bid
Nine Entertainment (ASX: NEC) shares rose by 0.6% after the media company confirmed it had begun negotiations about the sale of its stake in Domain to CoStar.
That comes after the US property giant made a $2.7 billion bid for the asset last month, with the Nine board now set to consider the proposal.
Innovative medical device disinfector Nanosonics (ASX: NAN) has been on an upward run which slowed a little after broker JPMorgan cut its recommendation from “neutral” to “underweight”.
The stock still edged up 0.8% to $5.02, extending its 14% gain in the prior session.
Small cap stock action
The Small Ords Index rallied 2.39% for the week to close at 3076.4 points.
ASX 200 vs Small Ords
The week ahead
Domestic news is set to take precedence in Australia this week as Treasurer Jim Chalmers releases the Federal Budget on Tuesday.
Most economists expect that the underlying cash deficit for the coming year which was forecast to be $26.9 billion in December we will narrow a little to around $22.5 billion.
As well as the budget, inflation numbers will be released with the CPI likely to be impacted by the unwinding of electricity rebates.
Price rises for education fees are also expected to show a large lift, in part because of a very lagged CPI indexation.
In America, the US Federal Reserve will also be closely watching its preferred personal consumption expenditures price index which is issued on Friday.
The PCE is expected to be above the Fed’s 2% inflation target.
It is also a really big week for dividend payouts for Australian shareholders with around $13.6 billion to be paid out to investors by 30 large companies.