Stocks end volatile week higher

The local market has gained more than 2pc for the week despite a lacklustre afternoon.

The Australian sharemarket has faded into the close, ending marginally higher after earlier gains of close to 1 per cent were recorded.

The lacklustre end to a volatile week came after a strong two-day rally had helped the local market recover much of its Brexit-related losses. At one point through the session the benchmark index was less than 10 points shy of where it stood at the close of trade last Thursday, ahead of the British referendum.

At the closing bell, the benchmark S&P/ASX 200 index edged up 13.2 points, or 0.25 per cent, to 5,246.6, while the broader All Ordinaries index tacked on 16.6 points, or 0.31 per cent, to 5,327.

The benchmark ended the week up 2.6 per cent.

Traders turned cautious ahead of further analysis of the impact of the Brexit vote through the weekend as well as Saturday’s Federal Election.

“The biggest risk from a market point of view could be the uncertainty that could arise from a minority government or the composition of the Senate,” CMC Markets chief market analyst Ric Spooner said.

Shares have risen by 4.8 per cent on average in the three months following the past 12 elections, according to analysis from AMP Capital chief economist Shane Oliver, although it might not be the case this year.

“Relief at getting the election out of the way may help but the likely failure of the new government to have control of the Senate, September quarter seasonal weakness in shares and Brexit uncertainty are likely to weigh in the short term even though I see shares being higher by year-end,” he said.

The local market was caught between two opposing forces at the close; a weakening banking sector and a strengthening resources sector.

In mining, local heavyweight BHP Billiton jumped 2.4 per cent to $19.09 despite fresh worries about its potential Brazilian dam collapse payout, while rival Rio Tinto gained 1.3 per cent to $46.07 on the day Sam Walsh stood aside for new boss Jean-Sebastien Jacques.

Iron ore group Fortescue surged 3.7 per cent to $3.63 as ore prices reached a six-week high.

The broader materials sector led the market with gains of 2.1 per cent.

In financials, the big four all ended off between 0.4 and 0.7 per cent, with Westpac the leader and Commonwealth Bank the laggard.

The energy sector straddled a line between financials and materials, ending mixed after a sell-off on crude markets on Thursday night tied to news Nigerian oil supplies may soon return to the market.

Santos lost 0.22 per cent to $4.63, while Woodside Petroleum dipped 0.75 per cent to $26.64.

Oil Search jumped 2.9 per cent to $6.86 as a new suitor, believed to be Exxon Mobil, emerged in the race to buy InterOil, with traders seemingly hopeful Exxon might win the day given the prospect of a bidding war is never palatable.

Elsewhere, Telstra added 0.36 per cent to $5.58 despite a fresh outage on Thursday, while Qantas sunk 2.1 per cent to $2.76.

Mesoblast served among the biggest winners for the session, soaring 15 per cent to $1.24 on positive news about its finances and a speedier timeline for a key drug trial, while Shaver Shop closed up 3.3 per cent at $1.085 on its debut.