ASX 200 weekly wrap: CBA, BHP & Wesfarmers post gains

Strength from the banks and major miners alongside a string of better-than-expected company earnings results helped lift the share market last week.

The benchmark S&P/ASX 200 finished the week up 1.67% at 6,167 points, while the broader All Ordinaries index rose 1.53% to 6,242 points.

AMP Capital Chief Economist Shane Oliver said the market was helped by reasonable earnings results, more talk of rate cuts and upgrades to earnings growth expectations for resource companies on the back of higher commodity prices.

“The Australian December half-earnings reporting season has been better-than-feared, but shows a slowdown in underlying growth, caution regarding the domestic outlook, but an overall upgrade in earnings growth expectations thanks to resources stocks,” Dr Oliver said.

Three of the big four banks led gains in market value, with CBA’s shares up 4.3% to $73.85, while ANZ and Westpac gained between 2% and 4.3%.

Mining giant BHP also finished in the green last week, adding $3.6 billion to its market value off the back of a rise in oil, gas and iron ore prices.

Bunnings and Kmart owner Wesfarmers’ shares rose 5.6% last week with its market value growing by $2.1 billion after revealing positive half-year results and promising to give back $1 billion to shareholders in a special dividend from the $3 billion they have now raised since splitting with supermarket giant Coles and the sale of its coal and auto businesses.

Coles’ shares dropped 8.5% and its market value shed $1.4 billion after it reported slower growth in its crucial like-for-like sales in the second quarter and a 14% fall in first-half profit.

Lower-than-expected earnings from Woolworths and software solutions provider WiseTech contributed to falls in their share prices.

Woolworths posted last week’s biggest fall in market value, which declined by $1.8 billion.

In other news, embattled wealth management company IOOF’s share price surged by almost 30% to $6.55, with investors left surprised by their better-than-expected half-year results.

Online travel business Webjet’s shares soared by 37.4% on the back of its positive earnings report which showed first-half profit rose by more than a third.

Meanwhile, waste management company Bingo Industries’ shares plunged 43% to $1.31, after the company informed investors that the housing downturn had hurt demand for its construction and demolition services.

Bingo CEO Daniel Tartak said a drop in residential construction activity in NSW and Victoria coupled with increased competition had led to pricing going backwards for the Sydney-based business.