Despite touching a 10-year high on Tuesday, the Australian stock market ended last week in negative territory on the back of broad based selling towards the end of the week. The benchmark S&P/ASX 200 index fell by 0.8% to 6075. The worst performers were consumer, industrials and property stocks. Resources stocks fared well on the back of strong commodity prices.
In the corporate news, Retail Food Group was weak after it issued a second profit warning in less than a month, saying the timing of new licence agreements overseas would mean its half-year net profit will be lower than the $22 million it predicted on December 19. Suncorp announced that claims from Melbourne’s December hailstorm would damage first-half results by between $160 million and $170 million. Vocus Group was strong after announcing Bellamy’s chairman John Ho was on-board as a non-executive director. Beach Energy was stronger following a positive monthly drilling report. Shares in Incitec pivot fell 4.3%, after the company said yesterday it wouldn’t be the explosive products and services supplier for Roy Hill after its contract ends early next month.
The Australian dollar was strong this week, touching a three-month high on the back of stronger-than-expected retail sales in December.
Abroad, the U.S. dollar extended losses to head for its fifth weekly decline after an index of U.S. producer prices unexpectedly contracted and the euro rose on speculation that policy tightening could come sooner than expected. In commodities, oil prices held near their highest level since May 2015, on concerns about supply risks due to unrest in Iran.