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Energy shares trade lower on oil volatility, growth stocks rise

ASX 200 shares rallied to a fourth week of gains as growth stocks held off negative energy shares.

Key ASX 200 equities in focus Source: Bloomberg

ASX 200 backs up best week since 2010 with another win

Australian equities held on to last week’s gains to extend its winning streak to a fourth week as Australia’s growth companies overwhelmed negative sentiment in the energy sector.

The benchmark ASX 200 index finished out the shortened trading week at the 5,487.50 point level. This was up from its close of 5387.3 points on Thursday last week ahead of the long Easter Break.

It also came on the back of the ASX 200’s best week since 2011.

All up, local shares were hemmed in either direction for much of the week. On the downside, horrid economic data out of China and the US – Australia’s largest trading partners – spooked the bulls, while growing confidence about Australia’s coronavirus battle and America’s plans to open up its economy brought them out.

The ASX 200 is now sitting 24.64% higher than its intraday low of 4402.50 points on 23 March , less than a month ago.

Afterpay and a2 Milk shares rise

The standout performer of the week was buy now pay later leader Afterpay, which finished the week up 31.8% at $29.00 per share, against its close of $22.00 per share on Thursday last week.

The company told investors on Tuesday that it was still growing despite the coronavirus disruption. The company also tightened spending limits and installed an upfront payment on Australian customers – something that was already in place in the US and UK – as a measure to hopefully keep bad debts under control.

Elsewhere, investors also cheered on IMF player a2 Milk, which has exposure to China’s lucrative formula market. The company touched fresh all-time highs and finished the week at $19.00 per share.

Energy stocks lag

By comparison to market darlings A2 and Afterpay, energy stocks waxed and waned throughout the week as investors tried to make sense of a mega production cut deal from OPEC+ nations and whether this would be enough to put a floor under the oil price.

Woodside Petroleum, Australia’s largest oil and gas company which was a takeover target of Royal Dutch Shell in the early 2000s, reported a 20% fall in sales revenue for Q1. All up, the energy giant’s shares declined 3.5% for the week to finish at the $21.08 mark.

Rival producer Santos ended the week 6.9% lower, while interestingly, Oil Search rose 1.5%.

Other bits and pieces

Safe haven buying saw gold prices surge, boosting Australian large cap gold miners in the process. Australia’s largest gold miner Newcrest ended the week up 11.4% to $28.57 per share; while Evolution Mining traded lower on Friday.

Shares in banking giant Westpac lost just 0.6% over the week despite the lender telling the market on Tuesday it expected lower first-half earnings and higher credit losses. Rivals ANZ and CBA both lost a little over 1% each, while National Australia Bank bucked the trend, finishing the week up 1.9%.

Looking forward, iron ore mining giant BHP is set to report its latest quarterly production results next week, though investors will likely be preoccupied with a string of high-profile earnings releases from US companies.

Netflix, IBM, Coke, American Express and Intel are all set to reveal their latest earnings results over the next week.

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