The local share market has suffered its worst weekly losses in nearly a year, dragged down by fears about China’s economy and rising bond yields in the United States.
The benchmark S&P/ASX200 index finished Friday basically flat, gaining 2.1 points, or 0.03 percent, to 7,148.1, while the broader All Ordinaries rose 1.6 points, or 0.02 percent, to 7,366.0.
For the week, the ASX200 finished down 2.6 per cent, its worst since a 3.9 percent loss 50 weeks ago.
AMP chief economist Shane Oliver said share markets globally fell over the past week on the back of concerns about more central bank rate hikes, ongoing upwards pressure on bond yields and worries about poor growth and real estate issues in China.
“Shares look to be entering a recession,” he wrote.
Tim Waterer, chief market analyst at KCM Trade, said there were dire macro indicators in China with a huge property developer on the brink of insolvency.
In the U.S., increased federal government borrowing and concerns about further rate hikes have led to a surge in bond yields, which are not showing any signs of letting up at this stage.
“Between an apparently hawkish Fed on one hand and Chinese economic woes on the other, financial markets have been bereft of good news this week, which explains the struggles of risk assets,” Mr. Waterer said.
Cryptocurrencies were also struggling, with Bitcoin falling over seven percent to a two-month low of $41,500 on Australian exchanges.
In a bit of consolation for investors on Friday, a number of companies rallied after reporting earnings results.
Magellan Financial Group leapt 13.3 percent to a nearly one-year high of $10.42 after the asset manager announced a special dividend and a new chairman.
Magellan has endured turmoil and outflows after the departure of star stockpicker Hamish Douglass in early 2022, but CEO David George said during 2022/23, the company had laid a foundation that would allow it to return to growth.
Packaging company Amcor added 5.6 percent to $14.96, and warehouse owner Goodman Group climbed 7.3 percent to $22.40, a day after both reported earnings.
Abacus Group rose 10.2 percent to $1.19 after the commercial property trust raised its payout following a 13 percent rise in property income.
The Big Four banks were lower, with CBA down 0.6 percent to $99.05, NAB 0.5 per cent to $27.68, and ANZ and Westpac both dipping 0.4 percent to $24.49 and $21.27.
In the heavyweight mining sector, BHP rose 1.4 percent to $43.69, Fortescue climbed 1.0 percent to $20.33, and Rio Tinto added 0.9 percent to $105.69.
The Australian dollar was buying 64.12 US cents, from 64.00 US cents from Thursday’s close.
Looking forward, there are no big macro events on the domestic calendar next week, although some of Australia’s biggest companies will be reporting earnings, including BHP, Wesfarmers, Woodside and Woolworths.
In the US, the Jackson Hole summit of central bankers will be held toward the end of the week in Wyoming, where attention will be focused on Federal Reserve chairman Jerome Powell’s address.
ON THE ASX:
* The S&P/ASX200 index finished Friday up 2.1 points, or 0.03 percent, at 7,148.1.
* The All Ordinaries gained 1.6 points, or 0.02 percent, to 7,366.0
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 64.12 US cents, from 64.64 US cents at Wednesday’s ASX close
* 94.06 Japanese yen, from 94.61 Japanese yen
* 58.93 Euro cents, from 58.82 Euro cents
* 50.36 British pence, from 50.26 pence
* 108.00 NZ cents, from 107.97 NZ cents.
