Stocks down sharply for the year

The local market has jumped close to 2pc in today’s session, but remains negative over the year.

The Australian sharemarket has ended the last session of the financial year on a high note, surging close to 2 per cent as investors around the world shrugged off worries about the Brexit vote.

The gains weren’t enough to end with a positive result for the year, however, as the benchmark index ended down 4.1 per cent over the 12 months to June 30.

At the closing bell, the benchmark S&P/ASX 200 index had advanced 91 points, or 1.8 per cent, to 5,233.4, while the broader All Ordinaries index jumped 89.4 points, or 1.7 per cent, to 5,310.4.

CMC Markets chief market strategist Michael McCarthy said the best day in almost two months was in part down to the receding fears over the impact of the Brexit vote, although the local market also received a boost from end of financial year ledger-squaring.

“Sharemarkets tend to mean revert at the end of the year,” he said.

“An up market will usually sell down, an index that is down for the year commonly rises. This is generally due to the activities of professional investors who must report their annual performance.”

Naeem Aslam, chief market analyst at Think Forex UK, said the recovery in global sentiment could largely be attributed to an assumption global central bankers will save the day if need be, although he warned the risks remained high for further volatility.

“It appears that Brexit has become a distant memory which traders do not want to recall and they are thinking that it was perhaps the best opportunity in a while for them to dip their toes back into the equity market,” he said.

“What they are betting is that either the central banks will flood the market with liquidity or article 50 will never be filed. Extremely dangerous assumptions these are and the downside risk is massive.”

The healthcare sector led the way through the session, gaining more than 3 per cent today thanks in large part to a stunning 28 per cent rise in Mayne Pharma shares to $1.90 after the group this week announced a US expansion.

The healthcare industry incidentally housed the worst-performed stock over the past 12 months in Mesoblast, which tumbled over 70 per cent as a key partner walked away in June.

The energy sector dominated the worst-performed stocks this year in the benchmark ASX200 index, however, with three names in the top 10. Among them were household brands Santos and Origin, off 40 and 50 per cent, respectively.

Both firms ended with a solid green day as energy stocks shone on news of a surge in oil prices overnight, with Santos closing up 2.2 per cent at $4.64 and Origin rallying 4 per cent to $5.75.

The big miners were also underachievers for the year, with BHP’s Samarco overhang ensuring its 30 per cent share price slump outweighed the 15 per cent reduction seen in Rio Tinto’s shares.

They ended with a bang though, with BHP climbing 1.9 per cent on the day to $18.65 and Rio lifting 1.5 per cent to $45.50.

It was a similar tale for the big banks, as daily gains of between 1.2 per cent (Commonwealth) and 2.8 per cent (NAB) failed to draw them out of the red in the last 12 months.

NAB and ANZ served as the laggards despite edging their counterparts during Thursday’s session, losing around a quarter of their value through the past year.

In fairness to NAB, part of this could be attributed to the Clydesdale demerger.

Meanwhile, CBA ended the year down 13 per cent, with Westpac off 9 per cent.

It’s little surprise then that the biggest 20 stocks underachieved compared to the remainder of the ASX200, with the ASX20 diving 12 per cent as against the 4.1 per cent broader market slide.

Among the positive stories were a more than 400 per cent surge in the value of APN News & Media and a sharp lift in the valuations of gold stocks, which benefitted from low rates and a flight to safety through volatile times.

St Barbara saw its value increase more than four times over, while Saracen Mineral and Regis Resources more than doubled their prices.

Among the country’s biggest 50 stocks, gold giant Newcrest served as the leader, soaring 80 per cent on the year.

The final day of the financial year was not kind for gold miners, however, with Newcrest slipping 2.2 per cent to $23 and Regis inching down 0.3 per cent to $3.42 as gold prices retreated.

Elsewhere, Telstra rose in today’s session by 1.5 per cent to $5.56 and Qantas recovered 1.8 per cent to $2.82.

The telco behemoth ended the year down 9 per cent on the back of a number of network outages.