Five straight weekly gains for Australian sharemarket, tech stocks back in favour amid investor ‘risk’ appetite

The Australian sharemarket racked up its fifth straight weekly gain – the best run this year – with tech stocks offsetting resources sector losses.

In morning trade, the benchmark S&P/ASX200 index broke through 7400 points for the second time ever – having done so for the first time on Wednesday – before pulling back to close 0.13 per cent higher at 7368.9.

The All Ordinaries Index rose 0.31 per cent to 7624.3.

That came despite choppy sessions on overseas markets overnight, CommSec analyst Steve Daghlian said.

“Mining and energy stocks continue to be the big weight for the third consecutive day,” he said.

Rio Tinto weakened 0.61 per cent to $123.47 and BHP fell 2.45 per cent to $46.52. Lithium miner Pilbara Minerals bucked the trend, gaining 4.89 per cent to $1.39.

Woodside Petroleum slid 2.15 per cent to $23.20, Santos declined 3.55 per cent to $7.34 and Oil Search retreated 2.89 per cent to $4.03.

Five straight weekly gains for Australian sharemarket, tech stocks back in favour amid investor ‘risk’ appetite

Camera IconGold stocks slipped as funds turned their attention back to the tech sector, OMG says. Credit: Supplied

“It has a bit to do with commodity prices which have taken quite a hit recently due to a strengthening US dollar, which tends to be a negative for commodity prices,” Mr Daghlian said.

“One of the reasons why the US dollar has jumped about 2 per cent in two days and keeps the Aussie dollar near the weakest level it’s been since the start of 2021 is that the US central bank, the Federal Reserve, just a day ago essentially brought forward its expected date for when it could start raising interest rates.”

The Aussie dollar was fetching 75.16 US cents, 54.01 British pence and 63.14 Euro cents in afternoon trade.

“Gold was down 4.5 per cent and many of the base metals were down between 2.5 per cent and about 3 per cent as well,” Mr Daghlian said.

Among gold miners, Newcrest dropped 2.95 per cent to $25.96 and Northern Star Resources gave up 2.37 per cent to $9.90.

“There’s definitely a ‘risk on’ attitude from investors at the moment with funds rotating out of precious metals such as gold and silver, back into tech and financials,” OMG chief executive Ivan Tchourilov said.

Buy-now-pay-later market leader Afterpay leapt 6.45 per cent to $114.40, smaller rival Zip Co soared 9.85 per cent to $8.14 and data centre operator NEXTDC lifted 3.68 per cent to $11.83.

Five straight weekly gains for Australian sharemarket, tech stocks back in favour amid investor ‘risk’ appetite

Camera IconBNPL stocks were standout performers. NCA NewsWire/Andrew Henshaw Credit: News Corp Australia

“The tech sector as a whole has continued to recover this week, even as inflation forecasts were brought forward from the US, China and France, after strong economic data forced central banks to readjust their outlook with regards to raising interest rates,” Mr Tchourilov said.

“The market has been getting spooked by commentary of this nature recently, but seems to be taking it in its stride at the moment.

“A bit of inflation in a record low interest rate environment is probably a good thing – it’s the pace at which it increases that can be a worry.”

The big banks fell for the first time this week, Mr Daghlian said, with Commonwealth Bank shedding 2.1 per cent to $103.69 after recently climbing to record heights.

ANZ slipped 0.86 per cent to $28.98, National Australia Bank eased 0.52 per cent to $26.87 and Westpac inched 0.22 per cent lower to $26.88.

NAB announced it had reached an agreement to settle a class action started in the US in 2016, saying the terms were confidential and the settlement was without admission of liability.

Woolworths investors voted in favour of the supermarket giant demerging its booze business Endeavour Group, which will list separately, with trading commencing on Thursday.

Five straight weekly gains for Australian sharemarket, tech stocks back in favour amid investor ‘risk’ appetite

Camera IconBWS owner Endeavour Group is splitting from parent company Woolworths. Glenn Campbell Credit: News Corp Australia

S&P Global Ratings said the strength of Woolworths’ supermarket operations would help it counter the effects of spinning of its high-margin liquor and hotels division.

“Although we expect the demerger to reduce the group’s scale and diversity, the quality of the group’s remaining core supermarket operations remains strong and we expect the successful execution of Woolworths’ operating strategy to replace the demerged earnings streams over the next few years,” the ratings agency said.

The Fair Work Ombudsman commenced Federal Court legal action against Woolworths after the retail giant disclosed in 2019 that it had underpaid thousands of salaried employees at its supermarkets and Metro stores.

Woolworths said it was reviewing the proceedings, which involved complex legal issues and “issues over which there is considerable uncertainty”.

Woolworths shares backtracked 1.57 per cent to $42.67.

Infant formula manufacturer Bubs Australia rocketed 29.3 per cent to 48.5 cents after announcing it had broken into the US market, clinching online deals with retail behemoths Walmart and Amazon.com

Five straight weekly gains for Australian sharemarket, tech stocks back in favour amid investor ‘risk’ appetite

Camera IconBubs Australia has had big wins in the US. Credit: Supplied

BetMakers Technology Group completed its acquisition of Sportech’s racing, tote and digital assets in the US, UK and Europe, with managing director Todd Buckingham saying it was “a pivotal step in seeing the business become the centre of global wagering”.

Shares in the company surged 12.96 per cent to $1.22.

Healthcare stocks had been well supported, Mr Tchourilov said, with sleep apnoea equipment producer ResMed rising strongly this week, closing 2.7 per cent higher at $31.91 on Friday.

He said Cochlear had also been on a good run after tanking earlier this year, finishing 1.38 per cent firmer at $246.72.

“The hearing implant maker doesn’t appear to have any short-term catalyst driving the breakout,” Mr Tchourilov said.

Five straight weekly gains for Australian sharemarket, tech stocks back in favour amid investor ‘risk’ appetite

Camera IconThis week's movers and shakers, supplied to NCA NewsWire by OMG. Credit: NCA NewsWire

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