The S&P/ASX 200 fell 73.3 points on Friday to close at 9,115.2, a decline of 0.8 per cent, while the All Ordinaries lost 68.2 points to 9,313.2. Across the five sessions the top-200 index shed 1.6 per cent, its worst week since April, with financials doing most of the damage. The index has now fallen in five of the last six sessions after setting a record high on 6 August.
The reversal is notable because of how strong the run into reporting season had been. Between 24 July and 6 August the market added 5.7 per cent, a broad move in which every sector finished higher, led by tech, energy, healthcare and materials. That advance unwound sharply in financials, which gave back 4.2 per cent over the past week.
Two forces drove the pullback. Housing market concerns weighed on bank stocks, while softer copper and gold prices dragged on the miners. Earnings have produced a mixed run of beats and misses, and with valuations near record levels investors have set a high bar for buying at these prices.
The commodity backdrop turned during the week. WTI crude fell 2.8 per cent to US$80.94 a barrel and Brent dropped 2.45 per cent to US$86.83 on demand concerns, while gold futures eased 1.2 per cent to US$4,413.60 an ounce on profit-taking after a strong run. Both moves landed on index heavyweights in the energy and materials sectors during the busiest stretch of the reporting calendar.
Offshore sentiment offered no support either. US futures weakened after fresh tariffs were imposed on drone imports, and the US Treasury Secretary flagged further measures against Iran. Over a longer horizon the index remains in reasonable shape, up 3.10 per cent over the past month and 1.98 per cent on the same time last year.
Whether this proves a routine consolidation or the start of something deeper will depend heavily on the next fortnight, with BHP and CSL among the marquee results still to land.
