ASX down for week, inflation fear persists

·4-min read

Australia's share market closed lower for a third consecutive day and the week, while US financial leaders will next week have another chance to persuade investors jittery about the prospect of inflation.

The S&P/ASX200 benchmark index closed lower by 37.7 points, or 0.56 per cent, to 6708.2 on Friday.

The All Ordinaries closed lower by 40.5 points, or 0.58 per cent, at 6963.1.

The energy sector sagged most, down 2.03 per cent. Oil prices plunged for a fifth day in a row on worries about rising COVID-19 cases in Europe.

The materials sector dropped 1.41 per cent although the iron ore price was steady.

For the week, the ASX200 dropped 0.87 per cent.

US markets were lower on Friday as bond yields rose a day after the US Federal Reserve's decision not to raise rates.

The central bank forecast 6.5 per cent growth this year for the economy and assured investors it would not raise rates soon.

ThinkMarkets analyst Carl Capolingua said the market was demanding higher yields to compensate for uncertainty and inflation.

The US 10-year yield was 1.7 per cent. The Australian 10-year yield was 1.8 per cent.

Mr Capolingua said the higher yields increased borrowing costs for companies and consumers, which translated to lower stock valuations.

He looked forward to Federal Reserve chairman Jerome Powell and Treasury Secretary Janet Yellen testifying before the US Senate next week on economic progress.

"Hopefully they will reassure markets that the Fed remains committed to low rates," Mr Capolingua said.

In Australia, retail sales figures for February showed a fall of 1.1 per cent due to COVID-19 lockdowns in Victoria and Western Australia.

Australian Bureau of Statistics preliminary figures showed turnover was up 8.7 per cent on February 2020.

On the ASX, gold miner Newcrest is assessing how a travel ban may affect its mine at Lihir in Papua New Guinea.

The Australian government suspended travel between the two countries for two weeks due to COVID-19 spreading through the Pacific nation.

The mine is closed for maintenance, but is restarting soon.

Newcrest said gold production was not affected by the travel decision.

A small number of workers have coronavirus and are in quarantine.

Shares were down 3.43 per cent to $24.20.

Fortescue raised $US1.5 billion from bonds.

The bonds had an interest rate of 4.375 per cent and mature in 2031.

The miner says the funds will help repay its $US750 million 2022 bonds, and may repay other debt.

Shares were down 1.43 per cent to $20.01.

Among other miners, BHP shed 1.73 per cent to $44.90 and Rio Tinto declined by 1.57 per cent to $109.06.

Origin Energy agreed to Blue Energy supplying 300 petajoules of gas over 10 years.

Blue will provide the gas from a Northern Territory site to an Origin site in Wallumbilla, Queensland.

Origin shares fell 0.86 per cent to $4.59. Blue shares gained 19.74 per cent to nine cents.

In banking, Westpac was best of the big four and rose 0.33 per cent to $24.52.

Next week will include a few interesting events on the share market.

On Monday, Airtasker will list. The labour hire organiser is keen to fund overseas expansion.

On Tuesday, Rip Curl owner and retailer Kathmandu will give first-half earnings.

On Wednesday, Premier Investments, which owns stores such as Just Jeans, Portmans and Smiggle, will give first-half earnings.

Premier in January raised first-half earnings expectations to an increase of up to 85 per cent on its 2020 first-half.

The Australian dollar was buying 77.43 US cents at 1723 AEDT, lower from 78.26 US cents at Thursday's close.


* The S&P/ASX200 benchmark index closed lower by 37.7 points, or 0.56 per cent, to 6708.2 on Friday.

* The All Ordinaries closed lower by 40.5 points, or 0.58 per cent, at 6963.1.

* At 1723 AEDT, the SPI200 futures index was down by 16 points, or 0.24 per cent, and trading at 6660 points.


One Australian dollar buys:

* 77.43 US cents, from 78.26 cents on Thursday

* 84.24 Japanese yen, from 85.19 yen

* 64.98 Euro cents, from 65.37 cents

* 55.66 British pence, from 56.04 pence

* 108.02 NZ cents, from 107.95 cents.