Tumbling metal prices and wobbly global markets dragged the local sharemarket lower on Friday, causing the index to finish the week in the red despite positive earnings results being welcomed by investors.
The S&P;/ASX200 finished down 0.8 per cent on Friday, and 1.2 per cent over the week to 5739.0, while the broader All Ordinaries index shed 1.1 per cent to 5786.9 over the five trading sessions.
As of Friday, 92.2 per cent of ASX companies had reported their results to the market. Of those, AMP Capital chief economist Shane Oliver noted, 46 per cent exceeded earnings expectations - compared to a norm of 44 per cent - and 59 per cent of companies had grown profits on a year ago.
However, this hasn't appeared to significantly impact the index.
"Reflecting the strong rally in the market ahead of the results only 50 per cent of companies have seen their share price outperform the market on the day they reported as a lot of good news was already priced in," Mr Oliver said.
On a weekly basis, the highly capitalised materials sector proved the biggest drag on the index. The sector was down 4.1 per cent over the week. On Friday, a 3 per cent fall in copper prices - the biggest one-day fall since September 2015 - helped push the miners lower - BHP fell 3.0 per cent and 5.9 per cent over the week, while Rio Tinto shed 4.2 per cent on Friday and 2.7 per cent for the week.
The week's biggest losers all fell on the back of disappointing earnings results. Isentia lost 40.8 per cent after flagging turbulence in its content marketing division. Ardent Leisure lost a quarter of its value - down 24.7 per cent. WorleyParsons shed 19.5 per cent, while Sky Network Television was 14.0 per cent lower. Vitamin company Blackmores also fell heavily, down 12.8 per cent.
On the other end of the spectrum, Asaleo Care soared 21.1 per cent over the week. NextDC was up 17.9 per cent after posting a 39 per cent profit jump on Friday, and McMillian Shakespeare added 12.6 per cent.
The big four banks, with the exception of CBA, all provided some support for the index over the week. NAB, Westpac and ANZ all rose 0.6 per cent. CBA, which went ex-dividend during the week, fell 2.8 per cent.
Stock watch: Ardent Leisure
Ardent Leisure shares fell 2.4 per cent on Friday to $1.65, cementing Thursday's 22 per cent wipe-out when the company revealed its profits had more than halved. Since October 25, when several visitors to Ardent Leisure's Dreamworld theme park were confirmed dead in a tragic ride malfunction, the company's shares have lost more than 30 per cent of their value. But analysts haven't written off the stock as savagely as investors - more than half who cover it on Friday maintained a 'hold' rating. After the results Deutsche Bank sounded its caution on Ardent Leisure's out-sized reliance on its Main Event business, which operates bowling businesses in the United States and is growing rapidly. "The reopening of Dreamworld is a positive first step in the recovery of this business however the lingering impact is still uncertain," Deutsche Bank's Kisirwani wrote, cutting the price target for the stock to $2.10.
Market Movers
Bitcoin's all-time high
Digital currency bitcoin hit an all-time high amid speculation that the first bitcoin exchange-traded fund (ETF) is set to receive approval from the US regulator. Traditional financial players have largely shunned the web-based "crytpocurrency," viewing it as too volatile, complicated and risky, and doubting its inherent value. The digital currency peaked at $US1186.09, more than $US20 above its previous all-time high of $US1165, which it hit in November 2013, at the height of Bitcoin-mania. Some analysts say regulatory approval of a bitcoin ETF would make the currency relatively attractive to the cautious institutional investor market.
Dollar bulls
The Australian dollar hit a new 2017 high early on Friday, as the greenback sagged after US Treasury Secretary Steve Mnuchin made it clear any structural reforms by the Trump administration will take time to boost the economy. The Aussie rose as far as US77.41¢, its highest level since the immediate aftermath of the US elections in November, before consolidating around US77.12¢ late on Friday. The new high extends a strong rise since the beginning of the year - the Aussie has soared against most major currencies.
Mnuchin's long bond proposal
US Tresury Secretary Steven Mnuchin, in interviews with the media, flagged that the US Treasury is studying the issuing of 50 or 100-year bonds, to take advantage of still-low US interest rates. "We'll reach out to the market, investors, different people, but I think it's a very serious issue, of whether we should explore whether we can raise 50 or 100-year money at a very slight premium," he told CNBC. The benchmark 30-year Treasury bond yield fell 2 basis points in response.
RBA on hold
RBA chief Philip Lowe said market pricing for steady rates this year seems "reasonable" - a signal that more cuts in interest rates are off the table. Futures market have almost priced out any chance of a rate cut this year. Some investors even toy with the idea of a rate hike by early 2018. Lowe told a parliamentary economics committee that the bank was paying "close attention" to the trends in household borrowing. "There is a balance to be struck. Too much borrowing today can create problems for tomorrow, because debt does have to be repaid," said Lowe.