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ASX ends up, best week since early Oct

Steven Deare
·4-min read

Investors may not yet have a US election result, but they were happy with how things stand and collected gains on the Australian share market.

The S&P/ASX200 benchmark index closed higher by 50.6 points, or 0.82 per cent, to 6190.2 on Friday, as Joe Biden inched closer to the presidency and vote counting continued.

The All Ordinaries closed up 51 points, or 0.8 per cent, to 6395.

The ASX200 closed the election week higher by 4.43 per cent.

It was the index's best week since early October.

While voting results of several US states were still to be declared, investors seized on the likelihood of the Republicans retaining the Senate and preventing major policy changes from a Democrat president.

That optimism kept the ASX200 higher throughout Friday's session.

The biggest dip came after 1110 AEDT when President Donald Trump, without evidence, claimed election officials were trying to help Mr Biden win.

Mr Trump claimed electoral fraud and reiterated he would go to the courts.

Investors appeared unmoved by the threat.

Pepperstone chief market strategist Chris Weston believed investors were happy the Republicans looked like controlling the Senate, and the Democrats would not have total control.

"I think markets have been positive because we're not going to get the tax hikes to personal and business incomes," he said.

Many believed Mr Biden would raise taxes if the Democrats had greater control.

Mr Weston believed most investors were convinced of the outcome, and noted the ASX traded at a fairly consistent level for the second half of the session.

"I think everyone's sitting on their hands now saying `What does this all mean?'.

"We need confirmation," he said.

Meanwhile, the Reserve Bank has confirmed it is not contemplating a further interest rate cut.

In its quarterly statement on monetary policy, the bank said rates have been lowered as far as it makes sense to do so.

New figures show the services industry expanding for the first time since November 2019 as government stimulus and improved confidence leads to an increase in sales, new orders and deliveries.

The Australian Industry Group performance of services index surged 15.2 points in October to 51.4 points.

On the ASX, the materials sector was strongest, higher by 2.17 per cent.

Gold miners surged. Northern Star was up 7.18 per cent to $16.56 and Evolution gained 6.66 per cent to $6.25.

Macquarie Group reported a 32 per cent dive in half-year profit after the impact of the coronavirus caused the group to write down the value of assets such as aircraft leasing operations.

The group's $985 million net profit for the six months to September 30 was lower due to $447 million in credit and write-down charges.

Shares closed higher by 2.27 per cent to $135.45.

NAB was best of the big four banks and climbed 1.35 per cent higher to $19.57.

Tabcorp closed higher by 15.82 per cent to $4.10 after a media report claiming private equity groups are interested in buying parts of the operation.

Tabcorp chair said it was unaware of any proposal.

Among other majors, BHP gained 1.26 per cent to $34.67, Rio Tinto gained 1.58 per cent to $93.40 and Fortescue ended lower by 0.48 per cent to $16.55.

The Northern Territory and South Australia will reveal their budgets next Tuesday. Tasmania will unveil its budget on Thursday.

Fortescue Metals will have its annual general meeting on Wednesday. Medibank Private and Woolworths will have their meetings on Thursday.

The Aussie dollar was buying 72.66 US cents at 1724 AEDT, higher from 71.63 US cents at Thursday's close.

ON THE ASX

* The S&P/ASX200 benchmark index closed higher by 50.6 points, or 0.82 per cent, to 6190.2 on Friday.

* The All Ordinaries closed up 51 points, or 0.8 per cent, to 6395.

* At 1724 AEDT, the SPI200 futures index had no change and was at 6187.

CURRENCY SNAPSHOT

One Australian dollar buys:

* 72.66 US cents, from 71.72 US cents on Thursday

* 75.25 Japanese yen, from 74.84 yen

* 61.48 Euro cents, from 61.10 cents

* 55.35 British pence, from 55.34 pence

* 107.06 NZ cents, from 107.06 cents.