Australian shares drop 1% over the week
Australian stocks fell 1% over the week, dragged down by Friday’s plunge, after the European Central Bank (ECB) announced economic stimulus measures that disappointed investors.
Huge gains made on Tuesday were not sufficient to lift the S&P/ASX 200 index, which plummeted 1.5% on Friday alone. Over five days, the benchmark stock index declined 51 points to end the week at 5,151.6.
“European and US markets had their biggest falls in more than two months overnight,” said CommSec market analyst, Steven Daghlian.
“The ECB decided to not increase the amount of money being spent on bond buying and stimulus program. This was a surprise to the market and global market slumped,” he said.
The US will release its November non-farm payrolls report tonight in Australian time, which may dictate market directions early next week.
The report shows the number of jobs added or cut in the US economy over the past month, excluding jobs related to the farming industry, and is an important indicator of the health of the world’s largest economy.
Industrial, mining stocks down
The S&P/ASX 200 Industrials Index shed 3.7% this week, the worst-performing sector in the ASX 200, with losses led by Spotless Group.
Spotless plunged 43% over five days after the company shocked investors with a full-year profit downgrade. The stock was also the biggest loser in the ASX 200.
The S&P/ASX 200 Materials Index slipped 3.4%, as falling commodity prices took a toll on miners.
BHP Billiton lost 4.5%, while Fortescue Metals tumbled 8%, as the iron ore spot price was down to around the US$40-per-tonne level.
BHP was also hit by news on Monday that the Brazilian government will be suing it and joint venture partner Vale for about US$5.2bn following damages caused by burst dams at their Samarco mine.
Meanwhile, Dick Smith Holdings slipped 41%, after managing director Nick Abboud said the company was unable to reaffirm the profit guidance it provided previously, due to non-cash writedown and an “uncertain trading outlook”.
Slater & Gordon rebounds
Law firm Slater & Gordon advanced 64% over five days, after sinking 74% last week.
Its stock had the biggest gain in the ASX 200 this week after group managing director Andrew Grech reaffirmed the company’s earnings guidance for the 2016 financial year.