Australian shares ended with slight gains on Friday but lost ground over the week, with an advance in the mining sector not enough to offset weakness in consumer staples and real estate stocks.
The S&P/ASX 200 index rose 2 points, or less than 0.1 per cent, to end the session at 6070 on Friday, with the move paring a weekly loss for the index to 0.9 per cent.
The All Ordinaries added half a point during Friday's trading session to end the day at 6176, while the Australian dollar traded at US78.85??.
Miners performed well on Friday, with BHP Billiton shares jumping 2.2 per cent to $31.53, Rio Tinto shares up 1.7 per cent to $80.62 and South32 shares higher by 4 per cent to $3.87, pushing the ASX mining index to its highest level in almost five years.
"Miners are getting re-rated and people are starting to recalibrate portfolios to the one sector that could see significant upside," said Perpetual's head of investment strategy Matt Sherwood.
He noted that Australian earnings are expected to be fairly subdued this year, with growth at around 5 per cent. However "commodities are the wild card," he said.
"It appears that the resources sector in Australia is starting to diverge from the growth outlook in China - prices are gaining but China is slowing down."
Data out on Friday showed that China's December imports missed market expectations, rising only 4.5 percent year-on-year, while exports beat forecasts with 10.9 percent growth.
The mining sector was one of a handful of sectors to gain over the week, rising 0.8 per cent, with investors also focusing on iron ore prices after cyclone warnings prompted the closure of a top export hub on Thursday.
While the retail sector ended the week with overall losses, with consumer discretionary stocks down 2 per cent overall, some individual retail names performed strongly over the week after better-than-expected retail sales figures were released on Thursday.
Super Retail climbed 3.6 per cent to $8.70 during the week and Harvey Norman rose 1.4 per cent to $4.38. JB Hi-Fi jumped 8.8 per cent to $28.36 over the week, with a broker upgrade also supporting the stock.
Consumer staples stocks saw a weekly loss of 2.2 per cent, with Woolworths and Wesfarmers sliding 0.6 per cent to $27.25 and Wesfarmers down 1 per cent to $43.73 on Friday. Real estate stocks were also punished, with the sector ending the week down 1.9 per cent, as were industrials, which fell 2.2 per cent.
Those sectors can act as bond proxies for investors. Bond markets had a turbulent week after US 10 year Treasury yields surged and ignited fears that bonds are headed for a bear market.
Rio Tinto shares climbed to a six-and-a-half year high on Friday, with the mining giant ending the session up 1.7 per cent at $80.62, with the move bringing weekly gains to 3 per cent. Spot iron ore prices have strengthened in the past few months and are almost at $80 a tonne. Rio Tinto is Australia's biggest iron ore exporter and looks set to surprise investors by meeting its 2017 export target, amid evidence shipping rates across the sector reached record highs in December. Rio will publish quarterly production data next week.
China's exports and imports growth slowed in December after unexpectedly surging in the previous month, adding to signs of ebbing economic growth as the government extends a crackdown on financial risks and factory pollution. December exports rose 10.9 percent from a year earlier, beating analysts' forecast of a 9.1 percent increase. Imports grew an even slower pace of 4.5 percent year-on-year in December. Imports missed analysts' forecast of 13.0 percent growth. The trade surplus reached $54 billion for the month, the highest since January 2016.
Gold prices rose for a third straight session on Friday to their highest level since September as the slumping dollar drew investors to the yellow metal.The rise in the gold price came after the euro jumped against the dollar following signals from the European Central Bank that it could begin to wind down its 2.5 trillion euro ($3.01 trillion) stimulus program this year. A stronger euro potentially boosts demand for gold by making dollar-priced bullion cheaper for investors outside the US. Bullion is on track for its fifth weekly gain. Spot gold edged up 0.5 per cent to $1,329.03 an ounce on Friday.
Oil prices eased on Friday after hitting their highest levels since December 2014 the previous day. Despite the dip, analysts said market fundamentals going into 2018 were strong due to ongoing production cuts led by the Organisation of the Petroleum Exporting Countries (OPEC) and Russia that coincide with healthy demand growth. US West Texas Intermediate crude futures were at $63.62 a barrel while Brent crude futures were at $69.25 a barrel.
Nomura Holdings topped the rankings for Japanese mergers for the first time since 2011. Nomura's resurgence in mergers advice last year was aided by large international deals including Toshiba Corp.'s $18 billion memory-chip unit sale. Japan's biggest brokerage has lagged behind global rivals on cross-border transactions in recent years, a trend that CEO Koji Nagai is trying to reverse by bolstering the firm's advisory capabilities in the US.
- With wires