AFTER a mid-week crescendo, the sharemarket lost vigour by the end of the week, as a series of weak leads from Wall Street knocked investor confidence.
The weightiest news came from the domestic economy, with banks and interest rates under the spotlight, along with a few shock profit announcements.
The volume of shares changing hands slowed yesterday as traders held off in the run-up to the release last night of key US employment figures and next week's federal budget.
For the week, the benchmark S&P/ASX 200 Index gained 34 points, or 0.8 per cent, to 4396.
The market rose strongly at the start of the week, hitting a closing high of 4435 on Wednesday. But consecutive weak leads eroded gains.
After its surprise cut in the cash rate on Tuesday, the Reserve Bank yesterday released its statement on monetary policy, revealing concerns about downside risks to the economy, along with a more subdued inflation forecast.
Economists said it was clear from the statement that there could be more cuts to come.
"The RBA sees scope to do more," said NAB senior economist David De Garis. "[By] how much more and when will be data-dependent [but] the door for more easing remains open."
Much business news this week centred on the profit results of the major banks.
ANZ lifted first-half profit by
10 per cent to $2.92 billion but said margins in its Australian business were declining.
Westpac's first-half cash profit of $3.195 billion slightly exceeded analysts' expectations.
Commonwealth Bank made the biggest cut in standard variable home loan rates by the big banks, reducing by 40 basis points.
After Westpac cut its standard variable rate by 37 basis points yesterday, the league table of variable mortgage rates for the big four banks looks like this: ANZ
7.42 per cent, Westpac 7.09, Commonwealth Bank 7.01, and National Australia Bank 6.99.
ANZ is now the only one of the big four that has not announced a cut. Its borrowers will hear where they stand next Friday.
For the week, Commonwealth shares climbed $1.03 (2 per cent) to $52.62 and Westpac gained 32?
(1.4 per cent) to $22.91 while NAB shed 1? to $25.14 and ANZ slipped 22? (0.9 per cent) to $23.44.
For the week, Woodside shares soared 97?, or 2.8 per cent, to $35.40, after it sealed a $2 billion deal to sell part of its stake in the proposed Browse LNG Development to Japan Australia LNG.
Alumina slipped 4.5?, or 3.9 per cent, to $1.10 after the company said pricing and demand would remain subdued in 2012 as the high dollar kept the company under pressure.
Dulux Group shares fell 10?, or 3.3 per cent, to $2.96, after the paint manufacturer's $188.4 million offer for garage door and cabinet maker Alesco.
Alesco shares jumped 61?, or 42.7 per cent, to $2.04.
Frequently Asked Questions about this Article…
How did the ASX 200 perform this week and what drove the weekly movement?
The S&P/ASX 200 gained 34 points (about 0.8%) to finish near 4396 for the week. The market hit a mid-week high (closing 4435 on Wednesday) but lost momentum by week‑end as weak leads from Wall Street, investor caution ahead of key US employment data and the federal budget, and mixed domestic news weighed on sentiment.
What did the RBA cash rate cut mean for investors and are more cuts possible?
The Reserve Bank surprised markets with a cash rate cut on Tuesday and its subsequent policy statement highlighted downside risks to the economy and a more subdued inflation outlook. Economists quoted in the article said the RBA sees scope to do more easing, so further cuts are possible but would be data‑dependent.
Which major banks reported profits this week and what were the headlines for investors?
ANZ lifted first‑half profit by 10% to $2.92 billion but warned margins in its Australian business were declining. Westpac reported a first‑half cash profit of $3.195 billion, slightly ahead of analysts' expectations. Those profit results were a major focus for investors assessing bank earnings and margins.
Have the big four banks changed their standard variable home loan rates and what are the current rates?
Yes — Commonwealth Bank cut its standard variable home loan rate by 40 basis points (the biggest cut among the big four), and Westpac followed with a 37 basis point cut. After those moves the league table of standard variable rates in the article showed ANZ 7.42%, Westpac 7.09%, Commonwealth 7.01% and NAB 6.99%. ANZ had not announced a cut at the time and was expected to update borrowers next Friday.
How did bank shares move this week after the profit and rate news?
Commonwealth Bank shares rose by about $1.03 to $52.62 for the week and Westpac gained to $22.91. NAB's shares slipped to $25.14 and ANZ fell to $23.44. The moves reflected profit updates, rate changes and investor reaction to margin commentary.
Why did Woodside shares rise and what was the deal mentioned in the article?
Woodside shares jumped after the company sealed a roughly $2 billion deal to sell part of its stake in the proposed Browse LNG development to Japan Australia LNG. The transaction lifted Woodside shares to about $35.40, a gain noted in the week’s trading.
What caused Alumina shares to fall and what should investors note about demand and pricing?
Alumina slid after the company warned that pricing and demand would remain subdued in 2012, and that a high Australian dollar was keeping the company under pressure. The stock fell to around $1.10, reflecting concerns about commodity pricing and currency effects.
What happened with Dulux and Alesco and how did their share prices react to the takeover activity?
Dulux Group's shares fell after it made a $188.4 million offer for garage door and cabinet maker Alesco; Dulux dropped to about $2.96. Alesco shares surged sharply — to about $2.04 — on the takeover interest, reflecting investor optimism about the deal price.
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