ASX ends poor week with another loss, CBA slumps; Nine, Domain surge

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket lost ground on Friday, dragged down by banks, consumer stocks and a slump in REA Group shares amid fears the real estate business will face tougher competition from a US giant keen to enter the local market.

The S&P/ASX 200 finished the day 26.6 points, or 0.3 per cent lower, at 8296.20, with five of 11 sectors in the green, led by utilities and materials. Consumer discretionary stocks led the declines, falling 1.5 per cent, while the financials and communication services fell 1.3 per cent.

The dour session marked the worst weekly loss in more than two years for the benchmark index, even as the local currency climbed to a two-month-high.

The Australian dollar earlier traded above US64¢ for the first time since December 10. Late Friday afternoon it had dropped slightly below that level, buying US63.95¢, up from US63.64¢ at 5pm AEDT on Thursday.

The Australian sharemarket lost ground on Friday, dragged down by banks, consumer stocks and a slump in property listings business REA Group.Credit: Dominic Lorrimer

The lifters

Mining giants had a strong day, with BHP and Rio Tinto shares jumping 2.8 per cent, and Fortescue rising 2.3 per cent after iron ore prices rose by 1.7 per cent overnight.

Shares in Domain (up 40.1 per cent) and its controlling shareholder Nine Entertainment (up 20.1 per cent) surged after US property giant CoStar lobbed a $2.7 billion takeover bid for the real estate platform.

Mayne Pharma soared 33.1 per cent to a 10-month high of $7.20 after agreeing to be acquired by US-based Cosette Pharmaceuticals in a $672 million deal.

Telix Pharmaceuticals also had a strong day, climbing 13.8 per cent to an all-time high of $30.12 after the Melbourne-based radiopharmaceutical company beat guidance by posting $783 million in full-year revenue, up 56 per cent from a year ago.

QBE shares lifted 3 per cent after the insurance giant said profits had soared 31 per cent to $US1.8 billion ($2.8 billion) in the 2024 financial year.

The insurer declared a dividend of 87 cents per share, up from 62 cents the previous year. The average premium rate increase was 5.5 per cent 20 per cent franked, down from 9.7 per cent, following easing inflation and lower claims. However, premiums in Australia, on average, rose 8.4 per cent compared to North America (7.3 per cent) and the rest of the world (3.7 per cent).

Consumer lender Latitude rose 4.3 per cent after it posted cash net profit after tax of $65.9 million, a rise of 139 per cent.

The laggards

Shares in Mexican fast-food chain Guzman y Gomez dropped 14.3 per cent, as the company’s first-half results fell short of the market’s expectations and sales in its US business fell.

News Corporation-controlled REA Group slumped by 11.4 per cent, dragging down the communications services sector, amid concerns it could face more competition if Domain bidder CoStar enters the market.

Commonwealth Bank, the largest stock on the ASX, fell 2.6 per cent, as rival banks Westpac (down 0.6 per cent), ANZ Bank (down 1.4 per cent) and NAB (down 0.1 per cent) also lost ground.

The lowdown

The decline on Friday caps off a soft week for the market, with shares in banks retreating after weaker-than-expected profit results from banks including Westpac, National Australia Bank and Bendigo and Adelaide Bank.

AMP’s head of investment strategy Shane Oliver said disappointing earnings news from resources firms had also weighed on the ASX this week, as did the Reserve Bank’s cautious commentary on the outlook for interest rates.

Oliver said he believed shares remained vulnerable to a correction at some point this year, also pointing to the risks of US President Donald Trump’s plans to impose sweeping tariffs.

“The key risk factors are stretched valuations, Trump’s tariffs and other policies potentially adding to US inflation and cutting into global and Australian growth and various geopolitical risks,” Oliver said.

While the RBA pushed back against market expectations of further rate cuts when it lowered the cash rate this Tuesday, Oliver said he thought the central bank’s caution was “overdone” and more rate cuts were coming in May and August.

On Thursday, a sharp slide from retail giant Walmart weighed on US stock indexes.

The S&P 500 slipped 0.4 per cent for its first drop after setting all-time highs in each of the last two days. The Dow Jones lost 450 points, or 1 per cent, and the Nasdaq composite sank 0.5 per cent.

Walmart drove the market lower after falling 6.5 per cent, even though the retailer reported stronger profit for the latest quarter than analysts expected. It gave a forecast for upcoming profit that fell short of analysts’ expectations as shoppers across the country deal with still-high inflation and the threat of tariffs from President Donald Trump.

Walmart is still forecasting growth in revenue for this upcoming year and said it has experience in navigating the effects of tariffs, but its profit outlook helped pull stocks lower across the retail industry. Costco fell 2.6 per cent, Target dropped 2 per cent and Amazon lost 1.7 per cent.

Palantir Technologies was another weight on the market. It fell 5.2 per cent to follow its 10.1 per cent drop from the day before, after US Defence Secretary Pete Hegseth said he wants to cut $50 billion ($78.1 billion) in spending next year. The software company got 55 per cent of its $2.9 billion in revenue last year from government customers.

Chinese e-commerce giant Alibaba saw its stock that trades in the United States climb 8.1 per cent after reporting stronger profit for the latest quarter than analysts expected. It also talked up its artificial-intelligence developments.

Traders have been paring back their expectations for how many cuts to interest rates the Fed may deliver this year, with some predicting zero. Many are pointing the potential effects of tariffs, but much of Wall Street is also banking on their ultimate impact being smaller than they initially seemed.

With AAP and AP

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.