As it happened: ASX closes 0.4% higher, Afterpay hit by Square result

The Australian share market powered through to its best week since May as investors embraced the outlook provided by central banks this week as well as good news on the corporate front from News Corp and takeover target Link Administration.

The S&P/ASX 200 closed 0.4 per cent higher, up 28.9 points to 7456.9, with all sectors posting gains for the week aside from energy which fell again on Friday on a weaker oil price.

Australian gold stocks were among the gainers as the RBA, the US Federal Reserve and the Bank of England indicated they were in no rush to raise interest rates.

“There’s a lot of market certainty about how the central banks are positioning themselves in the short to medium term,” Commsec analyst Tom Piotrowksi said.

This has led to falls in long term interest rates which have supported shares while banks Like CBA and Westpac lifting their fixed interest rates has also been seen as a positive by the market.

According to Bloomberg, Australia’s 10-year government bond yield fell as much as 8 points to 1.76 per cent with the weekly decline – down 31 points Friday afternoon – potentially the biggest in nine years.

Good news on the corporate front also helped the market.

News Corp shares jumped 7 per cent to close at $33.90after a strong result, including a billion dollar buyback, and indications that a potential float of Foxtel is progressing well. REA Group shares jumped 8 per cent to a record intraday high of $180.67 in response to its first quarter results.

Lin Administration was the other big performer after Private equity firm Carlyle returned to the table with a $2.8 billion offer which sent its share price up as much as 12.5 per cent before closing 8.5 per cent higher at $4.70.

On the downside, Afterpay was hit by Square’s results Friday morning, closing 5.5 per cent lower at $117.50, after its suitor reported soft revenue from bitcoin trading for the September quarter.

Dale Gillham , chief analyst at Wealth Within, warned that the outsized influence of mining and bank stocks could easily undo the recent market gains.

“While the All Ordinaries Index is up nearly 1.5 per cent, both the financial and materials sectors have been flat with the market largely being driven by the mid and small cap stocks this week. This is a concern because if both the materials and financial sector move down they will take the market with it,” Mr Gillham said.

But he was optimistic about the continuing strength of the market and what it means for the remainder of the year.

“The fact it has risen is a good sign because if it continues to rise next week, I am confident it will trade up past the all-time high before the end of the year,” he said.

Global share markets will be keeping a close eye on critical US data tonight with the Labor Department’s October jobs report providing an important indicator of the state of the economic recovery.