End of markets: ASX ends “week of accounts” with a first-rate rebound
A surge of blue chip stocks helped the Australian stock market stop a two-session decline on Friday, closing a volatile first trading week of the year.
Australian banking and mining blue chips roared on Friday to help the local stock market post a two-session decline and end a volatile week on a positive note.
ASX investors aggressively bought the downside following a savage global technology rout that rocked global stocks for days.
The benchmark ASX 200 added 95 points or 1.3 percent to close the week at 7,453.3, after falling 3 percent in the previous two sessions.
The largest All Ordinaries gained 95.1 points, or 1.2%, to end the holiday shortened week at 7,774.4.
Meanwhile, the Australian dollar weakened against the greenback, ending at 71.58 cents US at the local close.
All sectors gained ground on Friday, but high-end companies did the heavy lifting, including iron miners and energy stocks boosted by improving commodity prices.
BHP gained 2.5% to close at $ 43.73, Rio Tinto rose 2.4% to $ 103.63 and Fortescue Metals gained 3.1% to $ 20.37, while Woodside Petroleum rose by 2.2% to close at $ 22.70 and Santos gained 2.9% to $ 6.79.
Major banks and insurers also surged – including a 2.7% gain to $ 102.65 for the Commonwealth Bank – as beaten growth names such as Afterpay and Wisetech Global made up lost ground.
Friday’s rebound was not strong enough to mend Thursday’s dive, but the rally barely slid the market into positive territory for the first week of 2022.
“The new year started with a week of calculating, with volatility taking its toll on the market,” said Ivan Churilov, Managing Director of Openmarkets Group.
“Small gains followed by large losses have heightened uncertainty as speculation continues over Omicron’s duration and effects on the economy.
“The question remains whether 2022 will be the start of the Roaring Twenties or the start of a lost decade.”
IG Markets analyst Kyle Rodda noted that Wall Street also managed to dampen sales somewhat after investors took into account a series of aggressive rate hikes by the U.S. Federal Reserve.
He said an overnight report on the U.S. labor market would be a critical contributor to how markets perceive the risks of a future policy tightening, with the primary focus on wage growth.
“Given the tense – albeit disrupted – US labor market conditions, signs of a further wage price spiral could provide a boost to further political uncertainty and market volatility,” Mr. Rodda.
“A strong impression of jobs on the front page but only moderate wage growth could allay market concerns, at least in the short term.”
The ASX 200 gained 1.7 percent on Friday to hit a high of 7,484.6, before slowing down in the afternoon.
The market softened as NSW detailed new rules to limit the spread of the Omicron variant, including banning singing and dancing in pubs and nightclubs and reassessing various major upcoming events.
Nonetheless, financials ended the week on a good note.
The Macquarie Group continued its march to new highs with a gain of 1.2% to $ 211.71, while NAB rose 1.6% to $ 29.42, Westpac rose 1.3% to $ 21.76 and ANZ jumped 2.6% to $ 28.40.
Insurer Medibank Private rose 5.9% to $ 3.60, Suncorp rose 2.5% to $ 11.60, nib gained 3.7% to $ 7.23 and IAG gained 2, 3% to $ 4.46.
Afterpay recovered some of its heavy losses from the previous session, rising 3% to $ 74.
Another tech name for improvement was Wisetech Global, rising 3.4% to $ 55.95.
There were, however, a number of tech stocks still feeling the heat on Friday.
Xero fell 0.5% to $ 130.83, Altium fell 0.3% to $ 41.04, Appen fell 0.5% to $ 10.03, while BNPL player Zip Co lost 0.8% to $ 3.82.
Elsewhere, fiber-concrete maker James Hardie plunged 4.1% to $ 51.54 after chief executive Jack Truong suddenly left for misconduct.
Employees reportedly raised concerns about Truong’s “work-related interactions” and, after careful due diligence, decided it was time for him to leave.