Australia’s benchmark share index gained 1% over the week as better than expected economic data helped the market end a rollercoaster four days in positive territory.
The S&P/ASX 200 index firmed 51.20 points, with the week shortened by the Queen’s Birthday public holiday, to close at 5,545.30 on Friday.
Confidence, jobs and housing
“Strong economic growth numbers last week were followed by healthy business confidence and solid employment data,” CommSec economist Savanth Sebastian said.
Australia’s unemployment rate unexpectedly fell in May to 6%, its lowest level so far in 2015.
“To cap it all off, the latest data has shown that lending has lifted to a seven-year high. The key driver remains housing and, in that context, it is investor housing in particular that has driven the strength,” Sebastian said.
The housing-related activity helped lift furniture and home renovation retailer Harvey Norman (ASX: HVN) 7% over the week to $4.82.
GUD Holdings (ASX: GUD), which sells Sunbeam small appliances, Oates cleaning goods and other products for home use, advanced 3% on Friday to $9.57, making for an increase of 26.5% over the month.
“Encouragingly, the housing finance data on Tuesday showed that loans for construction of new dwellings surged by over 4 per cent in April. Housing activity will continue to be the backbone of the economy over the coming year,” Sebastian said.
BHP, Rio Tinto weaker; UGL powers ahead
Iron ore producers BHP Billiton (ASX: BHP) and Rio Tinto (ASX: RIO) ended the week lower as downgrades by ratings agency Fitch outweighed any positive sentiment from iron ore’s rise to a five-week high.
BHP closed down 1.2% to $27.90 on Friday, bringing its decline over the week to 6%. Rio Tinto shed 0.6% to $57.14, a weekly drop of 2%.
Fortescue Metals Group (ASX: FMG) eased 2 cents, or 0.8%, on Friday to $2.46, but gained 7.5% over the week.
TPG Telecom (ASX: TPM) eased 4.4% over the week to $8.64, while its acquisition target iiNet (ASX: IIN) shed 2.5% to $9.56 after the competition regulator said it needed more time to assess the planned takeover.
Energy utility UGL (ASX: UGL) climbed nearly 5% on Friday to $2.71, bringing its gains over the month to 26.6%. UGL has said it would bid for part of New South Wales’ $13bn electricity network.