Close Australian shares closed in the black on Friday on the back of a rise in mid-tier companies, but the late comeback could not prevent a third consecutive weekly loss.
At the close, the benchmark S&P/ASX200 index was 14.1 points higher, or 0.3 per cent, at 4370.1, while the broader All Ordinaries index gained 14.7 points, or 0.3 per cent, to 4404.1.
Among the major sectors, financials rose 0.4 per cent, materials inched 0.1 per cent higher, while energy shares closed flat and the gold sector lost 1.5 per cent.
For the week, the market lost 1.4 per cent, its third straight negative week after a string of weak US figures raised fears about a fresh slide into recession.
need2know:
- European shares edge lower in early trade
- Asian shares pare losses
- The dollar slips to 88.65 US cents
- Gold inches up to $US1237
- Oil hovers around $US73
- Dow futures are 25 points higher at 9992
"Medium and small companies have rescued their larger counterparts today, lifting the local sharemarket into positive territory despite generally soggy performances from the market leaders," City Index analyst Michael McCarthy.
"While the largest five resource stocks are all lower, the rest of the sector is a sea of green, suggesting a rotation out of global stocks and into more local exposures.
"The picture is similar in finance stocks. The major banks are flat overall, but IAG, AXA, Suncorp and most property trusts are pushing up."
The local sharemarket recovered ground thanks to investors rewarding high-performing companies, RBS Morgans director of equities Bill Chatterton said.
‘‘The reporting season, on balance, I thought was pretty good. But the market to date hasn’t responded to that,’’ he said.
Mr Chatterton said the local market was supported by buying into stocks that had announced good results and outlooks including Suncorp-Metway and Woolworths.
‘‘(Investors) are picking on some of the better performers in terms of that reporting period and adding to some of those stocks.’’
Big banks mixed
Among financial stocks, Suncorp added 9 cents to $8.35, while the big four banks were mixed.
Westpac gained 20 cents to $21.75, but ANZ Banking Group fell three cents to $22.44. National Australia Bank added four cents to $23.05 and Commonwealth Bank firmed 23 cents to $49.21.
Woolworths jumped 31 cents, or 1.1 per cent, to $27.85, thanks to its on-market share buy-back announced on Thursday.
Mr Chatterton said BHP Billiton and Rio Tinto did not participate in Friday’s upwards movement, with BHP losing 9 cents to $37.30 and Rio down 30 cents to $69.30.
‘‘BHP is an enormous opportunity, but the market is hesitant due to Potash,’’ he said, referring to BHP’s $44 billion bid for Potash Corporation of Saskatchewan.
Fairfax Media return to profitability pushed its shares up 6 cents, or 4.4 per cent to $1.42. Fairfax reported a net profit of $282.12 million in the year to June 30, 2010 compared with a loss of $380.05 million in the prior year.
‘‘The result was above expectations and it was a good outlook statement especially given the discretionary spending space is quite tough,’’ Mr De Stradis said.
Sims Metal rose 82 cents, or 5.3 per cent, to $16.36 after reporting recovered to a full year profit.
The energy sector was dragged lower as Woodside Petroleum started trading without a dividend.
Woodside’s shares lost 36 cents to $42.10, while Santos added 23 cents, or 1.6 per cent, to $14.30 and Oil Search firmed 3 cents to $5.73.
News Corporation fell seven cents to $15.54 and its non-voting scrip lost seven cents to $13.74.Toll road operator and takeover target Intoll Group was the top traded stock by volume, with 125.2 million shares traded for $184.9 million. Intoll’s shares gained two cents to $1.475.Preliminary national turnover reached 1.90 billion shares, worth $6.71 billion, with 560 stocks trading up, 457 down, and 374 unchanged.
Reporting season bottom line
As the reporting season heads into its final days, views are mixed on how the recent run of company results rates.
Ord Minnett investment adviser Francesco De Stradis said the reporting season had been ‘‘pretty reasonable’’ given the potential for disappointing results from some companies.
He said the local market had strengthened during the session on a weaker lead from Wall Street but all eyes would be on the revised US June quarter GDP figures, which were expected to show a slowing economy.
‘‘The initial estimate was 2.4 per cent and now US economists are expecting the economy grew by only 1.4 per cent,’’ he said. ‘‘If it comes in below 1.5 per cent, I would suggest the market might get a bit of a sell-off overseas.’’
Other analysts had a more negative view of the reporting season. Don Williams, chief investment officer at Platypus Asset Management, said it had been one of the worst reporting seasons he could remember.
"Even though expectations were low, some of the guidance put out by some large companies was much worse than expected," he said.
"A lot of companies had reasonable results but they were even more negative on the outlook than we were expecting," Mr Williams said, citing CSL and Computershare.
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AAP, with BusinessDay