Banks rally as Omicron weighs: ASX closes 0.5% lower over the week

The Australian sharemarket started the session on an optimistic note after Wall St closed sharply higher.  The morning followed the S&P 500 bouncing from a 2-day losing streak after notching its worst performance since October. This gave the local bourse a nice leg up after yesterday’s dip which was weighed down by the tech sector.

The volatility we have seen in the past week appeared in today’s session which was not unbeknown to investors. The local bourse traded as high as 0.8 per cent in the morning, lost momentum in early afternoon but managed to firm up by market close.

Gaining ground today was the financials sector coming in as the second best performer. To put this in a weekly context, major banks this week have been giving us a mixed cluster. Today, we saw a rally across the board with a strong advance near the order of 1.2 per cent. National Australia Bank (ASX:NAB) and ANZ (ASX:ANZ) came out on top both adding 1.3 per cent, Westpac (ASX:WBC) added 1.2 per cent while Commonwealth Bank (ASX:CBA) closed 0.7 per cent higher. Macquarie (ASX:MQG) added 0.6 per cent.

Another standout was the energy sector after OPEC+ stuck to their plans to release 400,000 barrels per day each month. The price of crude has also been on their rollercoaster ride since last Friday where the price slumped 13 per cent as uncertainty weighs on the impact of the new strain of Covid-19. The oil price retreated before going into rally mode to see a strong gain overnight. This helped Oil Search (ASX:OSH) surge 2.6 per cent to $3.94 and Woodside (ASX:WPL) add 1.2 per cent to $21.34.

Gold lost a bit of shine with the precious metal miners losing ground. Northern Star (ASX:NST) fell 2.7 per cent to $8.81 while Newcrest (ASX:NCM) closed 1.0 per cent lower to $22.77.

Amid the bullish note from Chinese Vice Premier Liu He suggesting that China is on track to beat its GDP growth target of “above 6 per cent” this year despite power shortages, and a slow down in the property sector, miners have performed well this week.

Adding to the momentum was the news from BHP (ASX:BHP) after the board approved scrapping the dual-listing structure making the ASX the primary exchange pending a shareholder vote next month. Shares rose 1.3 per cent. Rio Tinto (ASX:RIO) rode on the coat tails though added 1.4 per cent, while Fortescue Metals closed 0.9 per cent lower amid the iron ore price falling below US$100 a ton.

In other company news, CSL (ASX:CSL) tumbled 2.5 per cent after the biotech giant confirmed it was in talks with an offshore party who remains unknown in response to news reports that they were in exclusive talks with Swiss-based Vifor Pharma Group. CSL and Vifor have held talks for at least six months. According to the AFR, CSL was now in the due diligence phase as negotiations “advanced”.

TPG Telecom (ASX:TPG) dived 8.6 per cent to $6.05 on reports that its founder, David Teoh was looking to sell a significant stake through a block trade. The company posted in an update this morning that Mr David Teoh and his associates entered into an escrow agreement in June last year. The terms said that they must not dispose of, subject to certain exceptions, more than 20 per cent of their aggregate shareholding for a period of 24 months following the scheme of arrangement on 13 July 2020.

Investors will now pivot to Wall St for the big jobs report after the private jobs data from ADP showed 534,000 new jobs in November beating expectations. The non-farm payrolls report from the Labor Department slated at 12.30am AEST tonight is expected to deliver 550,000 jobs into the economy. Eyes will be on the participation rate after it was unchanged at 61.6 per cent. This follows the better than expected performance of 531,000 in October. US futures are mixed at time of writing while the Hang Seng is trading lower amid Didi's intention to delist from Wall St.

At the closing bell, the S&P/ASX 200 was 0.2 per cent or 16 points higher at 7,241. Over the week, it closed 0.5 per cent or 38 points lower declining for its fourth week in a row.

Futures

The Dow Jones futures are pointing to a rise of 40 points.
The S&P 500 futures are flat.
The Nasdaq futures are pointing to a fall of 17 points.
The SPI futures are pointing to a rise of 29 points when the market next opens.

Best and worst performers

The best-performing sector was Energy, up 1.6 per cent. The worst-performing sector was Health Care, down 1.7 per cent.

The best-performing stock in the S&P/ASX 200 was Pro Medicus (ASX:PME), closing almost 4 per cent higher at $57.78. It was followed by shares in Soul Pattinson (WH) (ASX:SOL) and Corporate Travel Management (ASX:CTD).

The worst-performing stock in the S&P/ASX 200 was TPG Telecom (ASX:TPG), closing 8.6 per cent lower at $6.05. It was followed by shares in Codan (ASX:CDA) and Kogan.com (ASX:KGN).

Asian markets

Japan's Nikkei has gained 0.5 per cent.
Hong Kong's Hang Seng has lost 0.8 per cent.
China's Shanghai Composite has gained 0.7 per cent.

Wall Street

Over the last four trading days, the Dow Jones lost 0.8 per cent, the S&P 500 lost 0.4 per cent and the Nasdaq lost 0.7 per cent.

Commodities and the dollar

Gold is trading at US$1773.74 an ounce.
Iron ore is 3 per cent lower at US$98.35 a ton.
Iron ore futures are pointing to a fall of 2.7 per cent.
Light crude is trading $1.31 higher at US$67.81 a barrel.
One Australian dollar is buying 70.77 US cents.