Sharemarket gains on tech, financials, AUB jumps on capital raise, AMP hit with more fines

The local sharemarket (ASX:XJO) finished 0.6 per cent higher on Friday, buoyed by a near 6 per cent gain in Xero (ASX:XRO) which pushed the technology sector 2.2 per cent higher. The financial sector also performed strongly, gaining 1.5 per cent, on the back of another surge in insurance companies including Insurance Australia Group (ASX:IAG). […]

The local sharemarket (ASX:XJO) finished 0.6 per cent higher on Friday, buoyed by a near 6 per cent gain in Xero (ASX:XRO) which pushed the technology sector 2.2 per cent higher. The financial sector also performed strongly, gaining 1.5 per cent, on the back of another surge in insurance companies including Insurance Australia Group (ASX:IAG). The strength pushed the market to a 0.3 per cent gain for the week, with the technology sector gaining 5.2 per cent. Energy gained 1.6 per cent amid one of the best weeks for oil in over a month, while coal stocks fell on Friday led by Whitehaven (ASX:WHC), down 4.3 per cent. Insurance broking group AUB (ASX:AUB) gained 5.9 per cent after the company confirmed it had raised $150 million in an effort to reverse cash flow challenges following a cancelled joint venture. Shipmaker Austal (ASX:AST) gained 26 per cent after the group confirmed it had won a US$3.2 billion contract in the US. AMP (ASX:AMP) shares managed to gain close to 1 per cent despite the company being hit with another $24 million fine from the Federal Court relating to the $600,000 in fees that had been collected from dead customers.

Debt ceiling talks on hold, Nasdaq gains for fourth straight week, Footlocker slumps

The Nasdaq managed to surge to a fourth straight weekly gain, up 3 per cent for the week, despite a 0.2 per cent fall on Friday. Strong sales growth in the technology sector has seen it come into focus once again, with the Dow Jones underperforming, down 0.3 and gaining 0.4 per cent for the week. The S&P500 was as usual middle of the road, falling 0.1 per cent on Friday, but gaining 1.6 per cent for the week. The driving sentiment was the pausing of talks regarding the impending debt ceiling in the US, with traders becoming concerned about the risk of a default and shutdown, despite the very low probability of this occurring. The Fed also suggested rate hikes could be set to slow, after noting the potential impact of the regional banking crisis on credit growth. On a company specific level, Footlocker (NYSE:FL) shares fell 27 per cent after the company reported an 11 per cent drop in sales for the quarter, with same store sales down 9.1 per cent. 

Private equity comes back, Deere remains resilient, Japanese stocks hit multi-decade high

Private equity remains a force to be reckoned with on the ASX, with local leader TPG unexpectedly raising its bid for funeral provider InvoCare (ASX:IVC) after the company suggested the initial offer undervalued its business. With such dislocation occurring in valuations, opportunities will continue to emerge for companies to become more valuable in a private setting. Strong economic momentum and lowering risks have seen the Nikkei 225 reach its highest point in 33 years, surpassing the levels hit during the boom years of the 1990’s. With the economy home to many cheap cyclical companies ripe for transformation, opportunities continue to emerge. The agricultural sector remains resilient, evidence by the strong performance of Deere & Co (NYSE:DE) as earnings exceed expectations, on the back of a near 40 per cent increase in quarterly profit. Sales were 30 per cent higher across the business, with precision agricultural the standout, up 53 per cent and turf sales up 16 per cent.