The ASX 200 slumped 1.8% for the shortened trading week, settling at 4823.
Mining companies bore the brunt of the Aussie dollar’s strength, with Bluescope Steel (BSL) in particular sinking over 10% last week.
The two mining giants also ended the week lower; BHP Billiton (BHP) lost 3.1% and Rio Tinto (RIO) shed 2.2%.
Lynas Corporation (LYC) tumbling almost 15% on environmental concerns over its proposed rare earths plant in Malaysia.
However Equinox Minerals (EQN) was among the sector’s bright spots, jumping 5.7% on the back of a takeover offer from Canadian-based Barrick Gold.
Computershare (CPU) was another standout performer after it agreed to buy BNY Mellon’s Shareowner Services division. CPU soared just over 8% for the week.
In the financial sector, Macquarie Group (MQG) weakened slightly despite its full year profit coming in ahead of guidance.
Among the big four, ANZ Bank (ANZ), Westpac Bank (WBC) and National Australia Bank (NAB) are all due to report their half year results this week.
NAB was the best performer of the three over the last week, rising 1.1%.
In economic news, Australian CPI rose 1.6% in the March quarter, ahead of economist expectations.
Although the result is likely to increase the pressure on the RBA to raise rates soon, the central bank is expected to leave the official cash on hold when it meets tomorrow.
Economic News. What Does it Mean?
Last week was a pretty quiet one on the economic front given the short trading week. The major data release was the CPI data released on Wednesday.
Australia’s Consumer Price Index jumped 1.6% in the March quarter, exceeding economist expectations of a 1.2% rise.
Core inflation rose 0.9%, showing that the headline figure was driven mostly by soaring oil prices and the recent flooding, which drove up food prices.
On an annualised basis, CPI increased by 3.3%, which was above the RBA’s 2% to 3% target band.
The result is likely to increase pressure on the central bank to raise interest rates sooner rather than later.
The RBA is set to meet tomorrow for its latest monthly decision on interest rates. While a rate rise is not expected, more hawkish comments (supportive for higher rates) could be on the way.
Overseas Market and Commodity Wrap:
Note: As last week’s Investors Report was published on Wednesday (following the national public holidays in Australia) the commentary below is based on the three days of trading since our last update.
Global equity markets were mixed in the short trading, but commodity prices mostly continued their surge on a weak US dollar.
American markets pushed higher, as the quarterly reporting season continued to produce strong company results. Around 60% of the 500 stocks in the S&P index have now reported, with around three quarters beating market expectations.
The Dow rose 1.7% since last week and the S&P added 1.2%. The Nasdaq climbed just 0.9% despite Amazon shares hitting record highs, with RIMM shares (makers of Blackberrys) plummeting.
European markets were mixed, with the FTSE flat in the second half of last week.
In Asia, most markets closed weaker. The Hang Seng dropped 1.2% and China fell 0.9%. The Nikkei was the exception, gaining 3% for the week to make up for recent falls.
Precious metals prices were the standouts last week, with gold rising 3.5% to hit fresh record highs of over US$1550 an ounce. Platinum rose a similar amount, while silver and palladium each added around 5%. In early trade today, silver prices slumped around 10% following last week’s margin tightening on the Chicago market.
Oil prices continued its climb, adding 1.7% to end the week at over US$114 a barrel.
Base metals were mixed, with most of the contracts moving less than 1% over the last few sessions.