After navigating a period of volatile market conditions, Australia’s domestic sharemarket has closed out the trading week with a modest but stabilizing gain, lifted by strong performances in mining and materials stocks even as telecommunications, utilities and real estate sectors dragged on overall growth.
The benchmark S&P/ASX 200 index climbed 0.41% on Friday alone, settling at 8,657 points for a 35.3-point daily gain. This uptick pushed the index to a 0.3% weekly increase, marking the second weekly gain the benchmark has recorded over the past six weeks. The broader All Ordinaries index matched the ASX 200’s 0.41% daily rise, while the Small Ordinaries index outperformed broader markets with a 1.1% gain by market close.
For the full week, consumer stocks and financial services emerged as the top-performing segments. This strength was fueled by recent increases in national unemployment, which have softened market expectations that the Reserve Bank of Australia will implement additional interest rate hikes in the coming months.
Friday’s trading session saw dramatic gains across uranium equities, with Paladin Energy rising 5.9%, Silex Systems jumping 6%, and Bannerman Energy surging 6.7%. Broader materials sector stocks also rallied, following a 9% sector-wide pullback that ran from May 12 to Wednesday’s market low, creating favorable entry points for investors. Rising global copper prices lifted mining stocks: Sandfire Resources gained 3.5% and Capstone Copper added 3.1%, after investment bank UBS upgraded its bullish outlook for copper, raising its three-year price forecasts by 13%, 4% and 3% respectively. Tight global supply, growing long-term demand from electric vehicle production, and power requirements for AI data centers are the key forces driving upward pressure on copper prices, UBS noted.
On the downside, the telecommunications sector posted steep losses on Friday. Telecom giant Telstra dropped 1.5%, property portal REA Group fell 4.1%, and employment platform Seek declined 5.8%. The sector’s most dramatic story came from Tuas, which saw a rollercoaster week: the firm plummeted 62% on Monday after revelations it was under investigation for a subsidiary’s alleged illegal use of unlicensed radio frequencies in Singapore, and the Singaporean government blocked a planned regional acquisition. By Friday, Tuas confirmed that the acquisition conditions had not been met and all parties had mutually walked away from the deal. The stock clawed back small losses in afternoon trading to close unchanged at $2.31 for the day. (NewsCorp, the parent company of newswire service that published this report, is the majority owner of REA Group.)
Utilities also weighed heavily on Friday’s trading: Origin Energy fell 1.8% and Mercury NZ dropped 2.8%. Financials delivered a mixed performance: Insurance Australia Group declined 3.4% after receiving a regulatory warning tied to the collapse of financier Greensill Capital, while QBE Insurance fell 1.3%. All of Australia’s big four retail banks posted solid gains between 0.5% and 0.9% for the day.
One of the session’s most notable single-stock moves came from Mexican fast-food chain Guzman Y Gomez, whose shares surged as much as 20.6% in early trading after the company announced it would immediately close all of its underperforming United States store locations. The stock closed the day up 9.6% following the announcement.
Josh Gilbert, market analyst at retail trading platform eToro, explained that Guzman Y Gomez had long been one of the most shorted stocks on the ASX, as investors lost confidence in the company’s US expansion strategy long before Friday’s announcement. “What markets don’t forgive is open-ended losses with no end in sight, and that’s what the company’s US operations had become,” Gilbert noted.
Looking ahead to next week, all market eyes will turn to Australia’s monthly inflation report, due for release on Wednesday. Economists forecast that headline inflation will ease to 4.4%, though the closely watched trimmed mean measure of core inflation is expected to tick slightly higher from 3.3% to 3.4%.