Stocks see best July in 6 years

The local sharemarket has extended its upward streak to five days after a rally late in the session.

The Australian sharemarket has recorded its best July in six years after its winning run extended to five days on Friday.

At the closing bell, the benchmark S&P/ASX 200 index edged up 5.7 points, or 0.1 per cent, to 5,562.3, while the broader All Ordinaries index tacked on 7.2 points, or 0.13 per cent, to 5,643.9.

The market appeared set for a red finish to the week until traders drove a sharp 0.3 per cent rebound in the last 20 minutes of the session.

It helped drag the market up 6.3 per cent for the month, the best July since 2010 and the strongest month since February last year.

The robust showing added around $100 billion to valuations through the first month of the financial year, putting super funds on track for a quick rebound from a lacklustre fiscal 2016.

In all, the market saw 17 positive sessions out of a possible 21 through the month, with the startling performance meaning just 13 out the nation’s top 200 listed companies saw a reduction in valuation.

The Friday session was dominated by interest in utilities and healthcare stocks, which had been among the underperformers through the week.

However, the other weekly laggard – energy – failed to flatter, as a new three-month low in crude prices drove steady selling.

The materials sector also saw red, while most of the big banks ended higher after stimulus from the Bank of Japan was on the light side of expectations.

IG chief market strategist Chris Weston said the BoJ hinted it could reverse tack on negative rates, a potential positive for the banks.

“It’s obvious that there has been a mini credit crunch in Japan and the banks have underperformed,” he said.

“The moves in the TOPIX banking sector today [were] prominent, with banks initially pushing up as they would have been pricing in an element of deeper negative rates (think worsening margins).”

Australia’s banks were largely carried up with the sector across the region, although local traders were cautious ahead of next Tuesday’s RBA policy meeting.

A rate cut, which is currently seen as a 65 per cent chance, could squeeze bank margins although stocks in the sector could also be aided by any downward move given the race for yield from investors.

In the meantime, the big four are trending higher, with Westpac jumping 0.9 per cent, NAB lifting 0.6 per cent and ANZ adding 0.3 per cent on Friday.

Commonwealth Bank bucked the trend, sliding 0.6 per cent.

The big miners and energy names were both hit hard after two days of heading in opposite directions.

Rio Tinto stumbled 2.1 per cent to $49.56, BHP Billiton shed 2.3 per cent to $19.52, while Fortescue slumped 4.1 per cent to $4.43 despite iron ore prices climbing 2 per cent.

The energy sector flailed for a third day, with Santos losing 1.6 per cent to $4.39, Woodside off 2.1 per cent to $26.53 as Shell outlined plans to offload its stake and Origin dipping 3.2 per cent to $5.50 after reporting a modest rise in revenue for the year.

Elsewhere, James Hardie softened 1.4 per cent after a management shake-up, Murray Goulburn plunged 8.4 per cent after it lost a private label contract with Woolworths, while rival Bega Cheese soared 6.9 per cent as it benefitted from the retailer’s decision to shun Murray Goulburn.

Among blue chips, Telstra gained 0.52 per cent to $5.77 and Qantas advanced 2.9 per cent to $3.16.

Meanwhile, the Australian dollar held above US75c through the session, closing the local trading day at US75.07c.