Stocks end week on flat note

The local bourse has crawled to a flat close, with early weekly gains dissipating as the big miners came under pressure.

 

The Australian sharemarket has ended a lacklustre week flat as investors were wary to make heavy bets ahead of the weekend.

At the close, the benchmark S&P/ASX 200 index inched up 0.8 of a point, or 0.01 per cent, to 5,436.3, while the broader All Ordinaries index tacked on 1.9 points, or 0.03 per cent, to 5,520.2.

For the week the benchmark index lost 0.6 per cent, with early week gains given up as sentiment turned negative on the big miners.

There has been talk of a repeat of a taper tantrum event as markets slide on rising expectations of the US Federal Reserve tightening monetary policy in December, although AMP Capital head of investment strategy Shane Oliver said the downside risks appeared limited.

“The US money market is now pricing in a 66 per cent probability of a December Fed rate hike and this is putting renewed upwards pressure on the value of the US dollar and on bond yields with the latter weighing on defensive high yield share market sectors like REITs and listed infrastructure,” he said.

“While this could contribute to a corrective pullback in shares in the short term, a return to the turmoil seen through the second half of last year and into early this year is unlikely.”

The last two Fed meetings are among a number of key events before the year is out, with Dr Oliver suggesting traders take a watchful approach in the near-term.

“October is often a rough month for shares and we remain cautious on shares in the short term as event risk is high for the months ahead including ongoing debate around the Fed and ECB, issues around eurozone banks, the US election on November 8 and the Italian Senate referendum and Austrian presidential election re-run (both on December 4),” he said.

“However, after any short term weakness, we anticipate shares to trend higher over the next 12 months helped by okay valuations, continuing easy global monetary conditions and moderate global economic growth.”

On Friday, resources stocks faced further pressure as commodity prices weakened offshore.

The materials sector was lower for a third day, with BHP Billiton weakening 0.9 per cent to $22.54, Rio Tinto sliding 1 per cent to $51.05 and Fortescue dipping 0.4 per cent to $4.88.

In energy, Santos edged down 0.3 per cent to $3.71, Origin Energy weakened 0.7 per cent to $5.52, while Woodside bucked the trend to rise 0.2 per cent to $29.54, with the three groups bouncing off lows as oil prices rallied through Asian trade.

The finance sector faced steady selling pressure, with CBA outperforming its peers by ending steady.

ANZ lagged among the big four by skidding 0.9 per cent, while NAB was off 0.6 per cent and Westpac softened 0.5 per cent.

Among other blue chips, Telstra bounced 0.4 per cent to $5.08, CSL advanced 1.2 per cent to $106.26 as traders sought out defensive sectors, while Qantas surged 3.8 per cent to $3.28.

Elsewhere, Fantastic shot up 40 per cent after accepting a $362 million takeover offer from Freedom owner Steinhoff Asia-Pacific.

Meanwhile, the Australian dollar edged up to US75.8c, ending the trading week almost where it started. It appears rangebound until the US election and next Fed meeting.