THE sharemarket shed most of its gains for the day to finish marginally higher yesterday, as investors shifted their focus from positive US economic growth data to tepid global corporate earnings.
The benchmark S&P/ASX 200 Index edged up 4.5 points, or 0.1 per cent, to 4476.9.
The main sectors, materials, financials, energy and consumer staples, all ended between 0.1 and 0.2 per cent higher. Health and telecommunications slipped 0.5 and 0.3 per cent respectively.
US gross domestic product figures, which came in at a 2 per cent annual rate for the third quarter, were a surprise for investors after the previous quarter had seen growth of 1.3 per cent.
The signs of a recovery in the world's largest economy helped the sharemarket get off to a quick start, said Wealth Within investment analyst Janine Cox. "If you look over the period back to 2008 when they were negative, and you look at everything that has happened after that, they've managed, for the most part, to maintain the positive," said Ms Cox.
A surge in gains over the past few weeks saw the ASX move above 4500, but the rise was cut back last week as the market consolidated the recent winning streak.
"The 4500-point mark is critical for our market," Ms Cox said. "Our market has been so strong over the past few weeks, it's just accelerated away from the trend, so I see this as part of a move back in towards the overall angle of the trend."
There was little activity in the big miners, with BHP trading relatively flat at $33.83, while rival Rio Tinto added 0.8 per cent to $56.92.
Iron ore miner Fortescue Metals lost 0.5 per cent to finish at $4.03. Iron ore was trading marginally lower, at $US119.60 a tonne.
Media stocks were at opposite ends of the spectrum yesterday, with Fairfax Media the best performer on the ASX 200 and Ten Network the worst. Fairfax jumped 7.8 per cent to 41.5?, while Ten fell 3.6 per cent to 26.5?.
"[Fairfax] is due to bottom out roughly where it is, but one week up on the market is not a turn of price direction," Ms Cox said.
"We've got to see two or three consecutive weeks up to at least have an indicator that Fairfax is moving again."
She said that if Fairfax could move above 45?, it had a good chance of pushing out of its record lows and showing investors that it had turned a corner.
Among the banks, ANZ traded flat at $25.23, CBA fell 0.1 per cent to $56.79, NAB lost 0.2 per cent to $25.86 while Westpac added 0.2 per cent to finish at $25.25.
Commonwealth Bank will hold its annual meeting today and NAB will report its full-year earnings tomorrow.
Frequently Asked Questions about this Article…
How did the Australian sharemarket (S&P/ASX 200) perform in the report?
The S&P/ASX 200 finished marginally higher, edging up 4.5 points (0.1%) to 4,476.9 after the market gave back most of an earlier gain.
Why did the market give back gains after a strong start?
Investors shifted attention from a surprise positive US GDP print to softer global corporate earnings, and the market consolidated recent gains after a strong multi‑week rally above the 4,500 level.
What was the US GDP result and how did it affect Australian stocks?
US GDP for the third quarter came in at a 2% annual rate (up from 1.3% the prior quarter). That surprise helped the ASX start strongly, but momentum eased as corporate earnings and local market consolidation took over.
Which ASX sectors led and lagged on the day?
Materials, financials, energy and consumer staples were the better performers (each up about 0.1–0.2%), while health and telecommunications slipped roughly 0.5% and 0.3% respectively.
How did the big miners and iron ore trade?
BHP was relatively flat at $33.83, Rio Tinto rose about 0.8% to $56.92, and Fortescue Metals fell 0.5% to $4.03. Iron ore was trading marginally lower at around US$119.60 a tonne.
Why is the 4,500-point level on the ASX important for investors?
Wealth Within analyst Janine Cox described the 4,500 mark as critical — the market’s recent acceleration above that level prompted a period of consolidation and a possible move back toward the longer‑term trend.
What happened to media stocks like Fairfax Media and Ten Network?
Fairfax Media was the best performer on the ASX 200, jumping 7.8% to 41.5, while Ten Network was the worst, falling 3.6% to 26.5. The article notes one week up for Fairfax doesn’t confirm a turnaround; Cox said she’d like to see two or three consecutive weeks up and a move above 45 to signal a clearer recovery.
Which bank updates should everyday investors note from the article?
ANZ traded flat at $25.23, Commonwealth Bank (CBA) slipped 0.1% to $56.79, NAB lost 0.2% to $25.86 and Westpac added 0.2% to $25.25. The article also flags that Commonwealth Bank will hold its annual meeting today and NAB will report full‑year earnings tomorrow.
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