The sharemarket had a good run this week, jumping above the 4500-point level on Wednesday and then closing at its highest point for the year yesterday.
But the last couple of days were also bizarre ones for the local exchange, with questions raised about the integrity of the market after a series of unusual transactions on Thursday morning stoked fears of market manipulation.
For the week, the S&P/ASX200 index rose 84.6 points, or 1.8 per cent, to 4571.1 points.
Market watchers said the four-day rally had been a positive one, given its composition: cyclical and resources stocks outperformed, while defensive stocks had a relatively bad week.
News that China's gross domestic product growth had slowed to 7.4 per cent in the September quarter - its lowest level since early 2009 - failed to worry investors.
It was seen instead as a sign that the world's second-biggest economy had started to stabilise, given its 2.2 per cent quarter-on-quarter growth rate had beaten market expectations (of 2 per cent).
Investors also welcomed news from Spain that the country had avoided having its credit rating slapped with a "junk status" sticker.
It helped Australia's miners shoot higher yesterday, with BHP Billiton jumping about 3.3 per cent to $35, its biggest one-day rise in 10 months, while Rio Tinto gained about 4.8 per cent to $59.15, its biggest one-day rise in 11 months.
But the week was also marred by questions about the integrity of trading on the Australian Securities Exchange, after strange and ultra-fast transactions in the seconds before the opening bell triggered fears of market manipulation.
The trading world had already been on edge about the issue of high-speed algorithmic trading. So alarm bells started to ring when on Thursday morning, in the moments before the market opened, share prices in more than eight blue-chip stocks - including ANZ Bank, Brambles, and Commonwealth Bank - spiked dramatically, before falling just as quickly.
The Australian Securities and Investments Commission and the Australian Securities Exchange said they were looking into the issue.
For the week, ASX rose 38? to $30.35 after the stock exchange proposed changes to its disclosure rules on market-sensitive information following failed legal action against Fortescue Metals Group, and a sham takeover bid for David Jones.
BHP Billiton rose $1.46 to $35 after the miner said it remained bullish about the demand for iron ore, despite predicting that Chinese steel consumption would slow.
Lend Lease gained 52?, at $8.76, after the developer said discrepancies in the accounts of its construction company, Abigroup, were a one-off and would not affect its financial results.
National Australia Bank rose 2? to $26.22 after it raised its provisions by $250 million to deal with the impact of an economic downturn.
Santos climbed 42?, at $11.99, after it maintained its full-year forecasts and achieved record quarterly sales revenue.
Ten Network Holdings fell 9? to 28? as the group prepared to axe up to 100 jobs from its newsroom following poor television ratings and a full-year net loss of almost $13 million.
Telstra added 14?, at $4.07, after it defended the closure of Australian call centres, saying the loss of those jobs had been offset by the creation of others elsewhere in the company.
Woodside rose $1.77 to $35.98 after it lifted its full-year targets and announced record production results, due to a better than expected performance at its Pluto operation.
with AAP
Frequently Asked Questions about this Article…
How did the S&P/ASX200 and the Australian sharemarket perform this week?
The sharemarket finished the week at its highest point for the year, with the S&P/ASX200 rising 84.6 points (about 1.8%) to 4,571.1 points after a four-day rally.
Why did Australian miners like BHP and Rio Tinto jump this week?
Miners rallied after investors saw signs of stabilisation in China (GDP growth slowed to 7.4% but quarter-on-quarter growth beat expectations) and positive global news such as Spain avoiding a junk credit rating — news that lifted demand sentiment for resources and helped BHP and Rio Tinto post their biggest one-day rises in months.
What were the market integrity concerns about ultra-fast trades on the ASX?
The article reported strange, ultra-fast transactions in the seconds before the opening bell that caused dramatic price spikes and immediate falls in more than eight blue-chip stocks (including ANZ, Brambles and Commonwealth Bank), raising fears of market manipulation tied to high-speed algorithmic trading.
Are regulators investigating the unusual pre-open trading activity?
Yes. The Australian Securities and Investments Commission (ASIC) and the Australian Securities Exchange (ASX) said they were looking into the unusual pre-open transactions that triggered concern about potential manipulation.
What did BHP say about iron ore demand and Chinese steel consumption?
BHP said it remained bullish about demand for iron ore, even while forecasting that Chinese steel consumption would slow — a commentary that helped support its share price rise to around $35.
Which energy and resources companies reported strong operational updates this week?
Woodside lifted its full-year targets and announced record production (helped by better-than-expected performance at its Pluto operation), pushing its share price higher to about $35.98. Santos maintained its full-year forecasts and reported record quarterly sales revenue, which also boosted its shares.
What company-specific headlines moved stocks this week (Lend Lease, NAB, Ten, Telstra)?
Several corporate updates affected share prices: Lend Lease said discrepancies at Abigroup were a one-off and its shares rose to $8.76; National Australia Bank raised provisions by $250 million and its stock moved higher to $26.22; Ten Network announced plans to cut up to 100 newsroom jobs after poor ratings and a near $13 million net loss, which weighed on its shares; and Telstra defended closing Australian call centres, saying job losses were offset by jobs created elsewhere, which supported its share price at about $4.07.
What should everyday investors watch after this week’s trading volatility on the ASX?
Investors should monitor ASX and ASIC updates about the pre-open trading probe, be aware of volatility around market opening times (where algorithmic activity was highlighted), and watch how cyclical/resources versus defensive stocks perform — the article noted cyclical and resources stocks outperformed while defensive stocks lagged during the rally.
Call 1300 880 160
Start a chat
Schedule a call
