[ASX nears record high as bank rally drives solid gains]


ASX nears record high as bank rally drives solid gainsSkip to sections navigationSkip to contentSkip to footerThe ASX nudged fresh highs on Friday as investors rushed into Commonwealth Bank and National Australia Bank shares. The two banks were the most heavily traded equities among the ASX 200, with CBA surging 2.5 per cent to a five-year high of $90.99.Strength in financial sector stocks helped drive the ASX 0.38 per cent higher to 7130.2 points, just 2.5 points short of the record high reached three weeks ago.The benchmark index closed just 2.5 points shy of its record high.Credit: James AlcockDemand for Australian equities remains strong even though half the companies that have reported half-year results so far have fallen short of market expectations, higher than a normal disappointment rate of 26 per cent, according to AMP Capital head of investment strategy Shane Oliver.”It is early days in the December-half profit reporting season as only about a quarter of major companies have reported but the results so far have been a bit mixed,” he said. About 61 per cent of companies have higher reported profits, but this is below the long-term trend of 65 per cent.”Australian shares are likely to do okay this year but with total returns also constrained to around 9 per cent given sub-par economic and profit growth.”Next week will see 100 major companies reporting, include Brambles, BHP, Cochlear, Coles and Fortescue.Baby Bunting CEO Matt Spencer said the effect of the coronavirus on earnings “cannot yet be readily determined.” Shares fell as much as 10 per cent during trading. Credit: Wayne TaylorBaby Bunting shares closed 5.3 per cent lower at $3.60 on Friday after it reported strong profit growth but left analysts worrying about its online store performance and whether it will stick to the big-box store format or rent space inside shopping centres.On Friday, the financial sector out-performed with an increase of 1.3 per cent and made the biggest contribution to the broader index’s gains. On top of the banks, Magellan Financial Group reached a record high and closed 3 per cent higher at $73.67, while the best performing stock was Pinnacle Investment, which leapt 4.7 per cent to $6.23.The energy sector dragged with a decline of 1.2 per cent, largely due to a 2.7 per cent slide in Woodside Petroleum to $32.82, a 1.3 per cent fall in Origin Energy to $7.76 and a 2.3 per cent drop in Worley to $14.14.LoadingThe worst performer on the index was Southern Cross Media, which sank 5.6 per cent to an 11-year low of 76.5¢. The company is set to deliver its half-year result next Friday.Pro Medicus fell 5.3 per cent and Breville Group softened by 4.4 per cent following a 28 per cent gain on Thursday.Most Viewed in BusinessLoading


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