Shares ended Friday higher but over the week surrendered some of their strong recent gains as the post-US election enthusiasm leeched out of equity markets, with Telstra the standout performer among the bluechips.
The S&P;/ASX 200 index added 21 points or 0.4 per cent on Friday to 5359 points, as the benchmark eased 11 points over the five sessions. The broader All Ordinaries Index added 19 points or 0.3 per cent to 5428, bringing the week's losses to 0.4 per cent.
Telstra was on Friday once again the standout performer, adding 1.9 per cent to $4.93 and bringing the week's gains to 4.5 per cent as it bounced off three-year lows following an investor meeting on Thursday in which the telco flagged $1 billion in cost savings over the next years and hinted at share buybacks.
Over the week some of the hardest hit stocks in the post US-election rally, including the big telco as well sectors especially vulnerable to higher bond yields such as listed property and utilities, reversed some of their losses. Toll road operator Transurban climbed 3.6 per cent and Westfield 6.2 per cent.
Selling in US and Australian government bonds moderated, but yields still ticked higher over the week for the Australian 10-year government bond to reach 10-month highs on Friday of 2.73 per cent as investors continued to digest the potential for higher inflation under a Trump presidency.
"There's a big shift from monetary to fiscal policies, the question is the matter of degree and what does that mean for real interest rates and then what that mean for the valuation of all assets," UBS Asset Management head of fixed income Anne Anderson said.
"The market is trying to figure out where it's going to settle, so it's always going to overshoot," Ms Anderson said.
Among the blue-chip names, the major banks were generally higher, aside from Westpac Banking Corp which fell 3.1 per cent as it traded ex-dividend during the week. ANZ Bank, which also traded ex-div, added 1.8 per cent, while Commonwealth Bank climbed 1.4 per cent and NAB gained 2.4 per cent.
Some of the heat came out of the hot mining sector, however, as BHP Billiton dropped 3.4 per cent, Rio Tinto dropped 3.7 per cent, while Fortescue lost 7.8 per cent and South32 a hefty 8.5 per cent.
Stock watch: Platinum Asset Management
Shares in Platinum Asset Management tumbled more than 3 per cent on Friday to $5.20 after Credit Suisse downgraded the stock to "underperform", saying the growth outlook for the asset manager remained weak and was underpinned by continued fund outflows. The broker pointed out that while Platinum's buyback scheme had been in operation for six weeks the company was actually yet to buy back any shares.
Given the share price's recent run, Credit Suisse said it's unlikely Platinum would buy back shares for anything less than fundamental value. Platinum announced at its AGM on Thursday that if outflows persist, but markets remained stable, the fund expected revenues in the first half of 2017 to be "flat" compared with 2016.
Market movers
Myer surge
Myer was the biggest winner on the benchmark index on Friday, soaring 14.4 per cent to $1.19 after the department store operator posted slightly better than expected growth in same-store sales. The surge sparked some raised eyebrows, given Myer's overall sales growth at 0.6 per cent remained anaemic, but investors explained the rise with short covering - Myer is one of the most heavily shorted shares on the market.
Aussie's lows
The Australian dollar remained under pressure on Friday, falling to US73.79c, its lowest since late June as the greenback continues to bulk up ahead of a now overwhelmingly expected US rate rise in December. Traders said the combination of strong US data as well as soft local employment and wages numbers had finally knocked the Aussie below key support levels, setting the currency up for further losses.
Iron ore falls
Spot iron ore prices were headed for their first weekly loss in six on Friday, as sliding futures and signals of slower Chinese demand for the steelmaking raw material pulled the commodity away from a two-year high. Chinese iron ore futures were down nearly 16 per cent from Monday's 33-month peak as speculators pulled out of commodities markets after exchanges hiked trading costs to rein in recent sharp gains.
US rate rise
The S&P; 500 index neared an all-time high, rising with the US dollar while bonds fell after Federal Reserve chair Janet Yellen signalled the central bank is close to raising interest rates, and failed to show any discomfort around rapidly rising bond yields. Traders are betting a Trump presidency will quicken the pace of interest-rate increases, pricing in a 98 per cent chance that the Fed will act next month, compared with odds of about 80 per cent before the election.
