ASX 200 shares ease 0.6% over the week
Australia’s shares have ended the week 0.6% lower, masking a volatile week as oil price fluctuations and China’s whipsaw financial markets overlaid the start of local earnings reporting season.
The benchmark S&P/ASX 200 index eased 0.6% over the week to 4,976.2, including a virtually flat showing on Friday when it edged 4.2 points, or 0.08% down.
“This has been a very turbulent week for markets,” said Steve Daghlian, market analyst at CommSec.
“When we’ve seen a gain one day, it’s been wiped out quite smartly the next,” Daghlian said.
The market’s choppy performance came to a head midweek, with the key stocks index falling 2.3% on Wednesday, and rising 2.1% on Thursday.
“Yesterday was the best day for our market since the middle of December; Wednesday was the worst day in five months,” Daghlian said, adding the market had returned to levels last seen in mid-December.
Commodities in focus
While China’s markets are closed next week for the Lunar New Year holiday, oil prices are expected to remain in focus along with other natural resources.
The price of benchmark Brent crude leaped 7% midweek, and iron ore added about 5% over the week.
The energy index firmed nearly 1% on Friday, ending the week virtually flat.
The resources sector added 3.2% on Friday, extending its advance to 5.3% over the week.
Firmer commodities prices propelled BHP Billiton (ASX: BHP) 5.7% ahead throughout the week to $16.20, including a gain of 4.9% on Friday, although its shares remain nearly 45% down over the past 12 months.
Rio Tinto (ASX: RIO) gained 6.5% over the week to $41.62, including a rise of 3.2% on Friday.
Earlier in the week, ratings agency Standard & Poor’s lowered BHP Billiton’s credit rating and put it and diversified mining rival Rio Tinto on negative credit watch.
Whitehaven Coal (ASX: WHC) ended the week 1 cent higher at 41 cents. However, its weekly showing included a drop of 3.5 cents, or 7.9% on Friday despite the company’s better than expected earnings.
“It did return to profit for the first time since about 2012, partly due to the fact that it’s producing a lot more coal and selling a lot more. It’s also become more efficient in terms of cutting costs,” Daghlian said.
Whitehaven’s shares have fallen 40% since January.
“The problem has been the price of coal has fallen substantially and that’s holding its profits back,” he added.
Gold was the standout, with the sector index up 12.6% over the week.
Australia’s largest gold producer, Newcrest Mining (ASX: NCM), leaped more than 16% over the week to $14.96.
Australia’s financial issues were softer over the week, easing 1.7%.
“If there’s one big drag on the market, it’s been the banks,” Daghlian said.
As of Friday afternoon, the nation’s four major banks had the top four market capitalisations, largely making them the market’s chief navigators.
Commonwealth Bank of Australia (ASX: CBA) fell 1% on Friday and 2.6% over the week to $76.60, Westpac Banking Corp (ASX: WBC) shed 0.4% on Friday and 1.8% over the week to $30.35, ANZ Bank (ASX: ANZ) eased 0.9% on Friday and 0.3% over the week to $24.09, and National Australia Bank (ASX: NAB) was 1.5% lower on Friday and 4% down over the week to $26.46.
NAB said on Wednesday it had completed the sale of UK-based Clydesdale Bank. It rose 10% yesterday and about 2% today.