The Australian share market has finished the second week of the new financial year with a back to back weekly gain. Despite volatile swings sparked by speculation surrounding the duration of US stimulus, local stocks capped four days of gains on a high.
Although pulling back from session highs by close, the top 200 stocks broke through the 5,000 barrier to touch a seven-week high after Wall Street saw record closing highs. The mining sector has been the standout of the week as bargain hunters moved in to boost the sector to the session’s best performer.
Figures
The S&P/ASX 200 index closed 8 points higher today, trimming gains over the session but extending the weekly gain of 132 points to finish at 4,974.
The value of trades was $4 billion on volume of 773 million shares at the close of trade.
The top three stocks by value were BHP Billiton Limited
(ASX:BHP), Commonwealth Bank of Australia
(ASX:CBA) and ANZ Banking Group
(ASX:ANZ).
On the futures market the SPI is 19 points higher.
Wall Street
US stocks have surged over the four trading days this week: The Dow Jones Industrial Average has rallied 472 points, the S&P 500 Index has gained 60 points, the Nasdaq has risen 135 points and the 100 Index has put on 118 points.
Economic news
The latest housing finance figures have shown the Reserve Bank of Australia’s (RBA) interest rate cuts are helping the housing sector. The Australian Bureau of Statistics reports home loan approvals rose 1.8 per cent in May from April. Total housing finance by value rose 2 per cent to $23.433 billion. While the figures show improvement the growth came in less than expected following a period in which the RBA has cut rates to a record low to boost growth in under-performing sectors.
Standard & Poor's has predicted Australia’s capital expenditure is set for a steep drop on the back of falling mining investment. The ratings agency has forecast Australian capex will drop 12 per cent in 2013 and more than 20 per cent in 2014, back-flipping from a rate of 20 per cent over 2011-12.
A study surveying 26,000 people has found Australia's work-life balance has declined over the year. The Regus Work-Life Balance Index gave Australia a score of 116, down from 131 last year and below the global average of 120. At the top of the ladder was Mexico followed by India, Brazil and China.
Contract awards
WorleyParsons Limited
(ASX:WOR) has scored a contract to work on a chemical plant in America. The engineering giant will provide services to energy group Sasol North America whose project costs are estimated to reach up to $US21 billion. WorleyParsons CEO Andrew Wood says the company will help Sasol realise the opportunity in America’s abundant gas reserves. Shares in WorleyParsons rose 2.48 per cent to end the week at $21.50.
Miclyn Express Offshore Limited
(ASX:MIO) has announced $US29 million of contract awards and capital deployment. The provider of service vessels has expanded its partnership with Seascape, scored three contracts in Malaysia, exercised options to purchase two vessels and inked a deal to construct six new vessels. Shares in Miclyn Express Offshore fell 0.8 per cent to end the week at $1.86.
China expansion
Goodman Group
(ASX:GMG) has reportedly struck a deal to invest more funds into Asia. The property investor and the Canadian Pension Plan Investment Board are understood to have agreed to expand their China Partnership by an extra $545 million - taking total commitments to $1.5 billion.
National Australia Bank Limited
(ASX:NAB) has reportedly inked a deal with China’s largest agricultural group. The bank is understood to have formed a relationship with state-owned China National Agricultural Development Group Corporation to enable farmers to access the nation’s growing agricultural demands.
Best and worst performers
The best performing sector was materials, adding 133 points to close at 9,086.
The worst performing sector was financials excluding real estate investment trusts, losing 29 points to close at 6,351 points.
The best performing stock in the S&PASX 200 was Perseus Mining Limited
(ASX:PRU), rising 13.33 per cent to close at $0.68. Shares in Emeco Holdings Limited
(ASX:EHL) and Newcrest Mining Limited
(ASX:NCM) also closed higher.
The worst performing stock was Resolute Mining Limited
(ASX:RSG), dropping 5.26 per cent to close at $0.63. Shares in Lynas Corporation Limited
(ASX:LYC) and iiNet Limited
(ASX:IIN) also closed lower.
IPOs
Inabox Group Limited
(ASX:IAB) started trading today. The telecommunications wholesale services provider floated with an issue price of $1.20, opened at $1.50 and a closed at $1.49.
Commodities
Gold is trading at $US1,280 an ounce, up $40.20 over the week.
Light crude is $0.19 lower at $US104.72 a barrel.
The Australian dollar
The Australian dollar is buying 91.79 US cents, down $0.004 over the week.
