Aussie sharemarket’s five-week winning streak ends, but analyst says 7500 ‘doesn’t feel challenging’ for S&P/ASX200

The longest weekly winning streak on the ASX this year has ended, with Sydney’s outbreak playing a role in the underperformance.

The Australian sharemarket rose in the final trading session of the week but ultimately ended up worse off compared to last Friday, snapping its longest winning streak of the year.

The benchmark S&P/ASX200 index closed 0.45 per cent higher at 7308 while the All Ordinaries Index gained 0.52 per cent to 7578.6.

That snapped a two-day losing streak but was not enough to push the market higher for a sixth straight week, CommSec said.

One of the group’s analysts, Steve Daghlian, noted the S&P 500 and tech-heavy Nasdaq indices on Wall Street hit record highs overnight after President Joe Biden secured a huge infrastructure spending deal in a bid to continue America’s Covid recovery.

The ASX had an early lift, but momentum wasn’t particularly strong, then faded in a choppy session.

Mr Daghlian said it had been a strong week for the resources sector but that came after heavy declines last week, triggered by concerns of higher interest rates in the US, a strengthening US dollar and, in turn, a pullback in commodity prices.

Rio Tinto improved 0.69 per cent to $125.22, BHP gained 0.63 per cent to $47.90 and Fortescue lifted 0.79 per cent to $22.92.

Equities analysts were in a reflective mood as the financial year draws to a close, with one saying “7500 doesn’t feel challenging” for the S&P/ASX200. Picture: NCA NewsWire/Joel Carrett

OMG chief executive Ivan Tchourilov said a big sell-off on the ASX on Monday was a reminder that volatility could rear its head “with just a few comments around interest rate rises from members of the Fed”.

“Our market has recovered reasonably well, but news out of Sydney that parts of the country’s biggest city is going into a week-long lock down has probably played a part in our underperformance over the week, compared to the US,” he said.

“After outperforming our global peers significantly in the month of May, we’re starting to see our market consolidate and look for direction from here.”

Travel stocks were largely higher despite NSW recording 22 new cases and four local government areas being locked down from midnight tonight.

Qantas advanced 2.16 per cent to $4.73, Sydney Airport appreciated 1.38 per cent to $5.86, Corporate Travel Management rose 2.14 per cent to $21.47, Flight Centre firmed 0.2 per cent to $15.07, Webjet backtracked 0.39 per cent to $5.06 and Regional Express dropped 1.6 per cent to $1.23.

Sydney Domestic Airport was a ghost town due to the growing Covid-19 outbreak. Picture: Damian Shaw

Many other sectors were also mixed.

Among buy-now-pay-later stocks, Zip dipped 3.06 per cent to $8.23, Afterpay slid 1.15 per cent to $129 and Openpay increased 1.6 per cent to $1.57.

In the energy sector after a slight uptick in oil prices, Woodside Petroleum eased 0.18 per cent to $22.54, Santos softened 0.14 per cent to $7.20 and Oil Search added 0.79 per cent to $3.81.

Coles found 0.18 per cent to $16.83 while Woolworths backtracked 2.57 per cent to $36.78 after plunging 11 per cent following the spin-off of its booze business Endeavour Group on Thursday.

Endeavour put on 1.33 per cent to $6.10 on Friday.

ANZ firmed 0.86 per cent to $28.28, Commonwealth Bank lifted 0.62 per cent to $99.26, National Australia Bank put on 0.35 per cent to $26.18 and Westpac inched 0.23 per cent higher to $25.89.

In company news, Seven Group Holdings offered conditional increases to its low-ball takeover bid for building products company Boral, saying “under no circumstances” would it exceed $7.40 cash per share.

Shares in Boral, which rejected the previous $6.50 per share offer as significantly undervaluing the company, jumped 6.38 per cent to $7.34 while Seven Group shares were 2.64 per cent lower at $20.30.

Kerry Stokes-led Seven says it won’t go above $7.40 per share for Boral. Picture: Nikki Short

A big weight on the market was the largest healthcare stock, biotech giant CSL, which slid 0.52 per cent to $285.13.

“With FY21 almost behind us, fund managers and investors will be reworking portfolios to crystallise losses and potentially lock in gains,” Mr Tchourilov said.

“This time of year there’s typically quite a bit of rebalancing going on, and sectors of note have been the financials which have come off the boil somewhat over the past couple of weeks.

“The sector has performed strongly this financial year and overall still looks good fundamentally, but it all depends on how the rest of the pandemic pans out.”

RBC Capital Markets head of equities Karen Jorritsma was also in a reflective mood in the final days of this financial year.

“A week out from the end of FY21 and with a lack of profit warnings so far during this confession season, feels like this market is running hard,” she said.

“7500 doesn’t feel challenging, especially with the M&A (mergers and acquisitions) only just starting to warm up.”

The Aussie dollar was fetching 75.95 US cents, 54.59 British pence and 63.57 Euro cents in afternoon trade.

This week's movers and shakers, provided to NCA NewsWire by OMG.

Originally published as Aussie sharemarket’s five-week winning streak ends, but analyst says 7500 ‘doesn’t feel challenging’ for S&P/ASX200