Australian shares drop 0.5% over the week
The Australian share market fell 0.5% over the week, as it was unable to reverse any of the previous week’s 2.1% decline.
On Friday alone, the S&P/ASX 200 index lost 0.8% in morning trade before rebounding in the afternoon to register a daily gain of around 0.5%. Over five days, the index shed 24.4 points to end the week at 5,215.
“The market has been losing ground since Wednesday, and there hasn’t been any particular catalyst,” said CommSec market analyst Tom Piotrowski.
The US jobs report for October, which will be released tonight in Australian time, “probably would have played into the caution that you’ve seen over the course of the last couple of days”, he said.
The S&P/ASX 200 VIX index, which measures market volatility, ranged from 18.9 to 21.1 this week. A reading of 15-20 indicates that investors are cautious about the market’s prospects in the next 30 days, while a reading of 20-30 suggests that they hold a negative view
CommSec market analyst Steven Daghlian added that the US jobs report will be the key driver for the stock market early next week.
“If there’s a much stronger than expected report, you might see the US dollar rising and the Aussie dollar falling. If it’s much weaker, it could be the opposite, maybe a bit of strength for the Aussie dollar,” Daghlian said.
Financials the biggest drag
The S&P/ASX 200 Financials Index declined 1.2%, dragging down the ASX 200 this week, as shares in NAB began trading ex-dividend yesterday, while ANZ shares went ex-dividend today.
NAB slipped 5%, the worst performing stock in the financials gauge, followed by ANZ, which dropped 4.6%.
Shares bought on or after an ex-dividend date do not entitle you to the most recent dividend declared by a company.
Meanwhile, an Ernst & Young report this week pointed out that while the big four banks’ combined cash profit for the 2015 financial year was 5.3% higher than last year, their average interest margin continued to diminish.
Mixed news from AGMs
Building products maker CSR surged 4.1% on Wednesday after saying it expected to post higher earnings for the 12 months to March 2016.
Domino’s Pizza advanced 3.2% on Tuesday ahead of its annual general meeting on Wednesday, where the company announced a profit forecast upgrade.
Meanwhile, Boral declined 1.1% yesterday after stating that earnings for the 2016 financial year would be in line with last year.
“That’s basically reaffirming its forecast but it’s going to be flat [growth] year on year. You tend not to be getting a tide lifting all boats with all these themes so some companies are doing better in terms of execution than others,” Piotrowski said.