A rally in bank stocks on Friday was not enough to lift the Australian sharemarket out of its doldrums as stocks fell for the fourth week in a row, despite the promise of ongoing global liquidity.
Over the past week, the benchmark S&P/ASX 200 lost 1.8 per cent to 5433.1 points, while the broader All Ordinaries shed 1.7 per cent to 5437.3 points, as investors sold the big four banks.
On Friday, the ASX 200 and the All Ords each lifted 0.3 per cent as the big four banks regained some support. Global markets got a reprieve on Friday as Scotland voted against independence from the United Kingdom, a prospect that had been tipped to spark chaos.
Japanese stocks extended their gains to seven-year highs over the week, as sentiment was boosted by Prime Minister Shinzo Abe pledging to undertake pension fund reform and as the yen weakened against the US dollar.
The pivotal event of the week in global markets came before the local market opened on Thursday when US Federal Reserve chair Janet Yellen reiterated the central bank will keep interest rates at near zero for a "considerable time".
On Wall Street, both the S&P 500 and the Dow Jones Industrial Average pushed to record highs on Thursday.
The big four banks and Telstra have suffered two straight weeks of losses as the Australian dollar finally began to fall and investors looked away from high dividend paying yield stocks and towards companies with new revenue streams, Patersons Securities strategist Tony Farnham said.
"There is talk of investors looking to US exposed stocks, for me, I look at that and say 'do it and choose wisely'. It's not a cheap market," Mr Farnham said.
Despite getting a pick-up on Friday, it was the big four banks that did the most to weigh on the index over the past week. Commonwealth Bank of Australia lost 3 per cent to $77.81, and Westpac Banking Corporation fell 0.4 per cent to $33.17. National Australia Bank shed 1 per cent to $33.90, while Australia and New Zealand Banking Group, which entered a correction during the week dropped 2.8 per cent to $31.92.
Premier Investments, the retail group controlled by Solomon Lew, added 10.4 per cent to $10.81 after reporting underlying earnings growth of 10.9 per cent to $92.8 million, with sales growth of 6.2 per cent and like-for-like sales growth of 4.7 per cent.
The result was in stark contrast to department store operator Myer Holdings , which last week reported flat sales growth. It is speculated that Mr Lew may use to proceeds from the sale of his stake in David Jones and Country Road, around $313 million, to launch a bid for Myer. Shares in Myer added 0.5 per cent to $2.03 over the week.
It was a tough week for the mining sector as China banned imports of dirty coal and the spot price of iron ore remained around six-year lows. When the ASX closed, iron ore was fetching $US83 per tonne with futures traders tipping a fall overnight. Among the biggest miners, BHP Billiton fell 0.9 per cent to $35.48 and Rio Tinto dropped 0.5 per cent to $61.59.
Junior iron ore miner Arrium was the worst-performing stock of the week plummeting 42.3 per cent to 37.5 cents. The stock was dumped after it came out of a trading halt on Thursday following the completion of the institutional part of a $754 million capital raising.
Oil and gas explorer AWE was the top stock in the ASX 200 after the discovery of what may be Australia's biggest onshore gas discovery since the 1960s. AWE added 3.1 per cent to $1.97, while joint venture partner Origin Energy dropped 0.4 per cent to $15.11.
