Shares back in black as threat of Syria missile strike wanes
As war cries over Syria's use of chemical weapons quietened, Australian shares found some relief to finish the week in the black.
In the last day of trade for the month, gains were posted across the board. The benchmark S&P/ASX 200 Index rose 42.59 points, or 0.8 per cent, to 5135, while the broader All Ordinaries rose 42.1 points, or 0.8 per cent, to 5125.3.
It had been quite a week. The threat of a US-led missile strike seemed imminent on Wednesday, but lost steam after it failed to gather international support.
That steadied the ASX's pulse, with the leading index recording a rise of 0.2 per cent for the week.
But Australian equities manager at Platypus Asset Management Donald Williams said he was expecting subdued or choppy trade until the US decides how it will handle Syria.
"As soon as something happens, then the markets will probably rally," Mr Williams said.
Resource stocks - which have been battered for most of the month - weighed heavily on the market, with the materials sector falling 0.7 per cent for the week.
Rio Tinto fell 2.7 per cent to $58.30, while rival BHP Billiton rose 0.3 per cent to $35.75.
Much of the volatility around the big miners has stemmed from uncertainty about growth in China and a sharp fall in metals prices, which began in mid-June.
Investors will look for more clues about the health of our biggest trading partner's economy this weekend when it releases its manufacturing purchasing managers' index data.
HSBC chief economist Paul Bloxham expected China's growth to stabilise at 7.5 per cent in the year ahead and in 2015.
However, he said commodity prices would be supported by the Asian powerhouse beefing up its infrastructure spending, which has been growing at 20 per cent a year. "It's good news for resource producers in Australia, which have been boosting profits by cost cutting," he said.
Health stocks led the market for the month, with the sub index rising 66.3 per cent. Ramsay Healthcare was the sector's biggest performer this week, advancing 11 per cent to $37.35 after it ended a bitter dispute with Medicare by signing a record three-year contract with the insurer on Thursday.
Consumer staples were also strong. Woolworths posted a 6.3 per cent rise for the week to $35.67, after the supermarket chain announced its underlying net profit climbed 8 per cent last financial year, and its chief executive said he expected double-digit growth in the coming year.
Beleaguered surfwear company Billabong was the worst performer on the ASX this week, diving 24.78 per cent to 42.5 cents after it said it needed to decide on a funding lifeline as soon as possible after its full year loss more than tripled, diving to $860 million.
The big banks were mixed. Commonwealth strengthened 1.1 per cent to $72.84, and ANZ finished the week slightly higher, up 0.2 per cent at $29.69. NAB was flat, losing 1¢, or 0.03 per cent for the week, while Westpac lost 0.6 per cent to $31.39.
Oil fell by more than 1 per cent on Friday as concerns about an attack on Syria, and the potential for unrest to spread to its oil rich neighbours, eased. West Texas Crude, the US benchmark, settled at $US108.80 a barrel after soaring above $US110 on Wednesday.
Gold, which investors were quick to dump for equities for earlier in the week, also weakened slightly, falling 0.3 per cent to $US1403.71 an ounce.