ASX rallies, but drops 2pc on the week

Australian shares rallied 1.3 per cent on Friday in broad gains after upbeat data soothed fears that the US economy was facing a recession, ending a brutal week for global markets on a positive note.

All 11 sectors rose, with tech vaulting a whopping 3.1 per cent as family tracking app Life360 hit an intraday record high after upgrading full-year revenue guidance and revealing global expansion plans. Stock soared more than 18 per cent to close at $17.56. It was the top performer of the benchmark.

“There is a lot to like. The company has had a strong start to the first half, achieving an all-time quarterly record of new circles added, while increasing its paying member base by 132,000 users,” said Michael Higgins, portfolio manager at Milford.

News Corp, the publishing and broadcast giant controlled by the Murdoch family, was also among the top gainers on news it planned to put its majority-owned Australian pay television platform Foxtel up for sale. Its shares rose 7.6 per cent to $44.54.

Overall, the benchmark S&P/ASX 200 Index closed 95.7 points higher at 7777.7, following a 0.2 per cent fall on Thursday. Yet, on the week it was down 2 per cent, the biggest such loss since mid-April. All Ords also advanced 1.3 per cent.

Damien Klassen, head of investments for Nucleus Wealth, said this reporting season for global companies had been among the best ones in the past few years.

“The fundamentals for company earnings are looking a lot better than they have for some time,” he said, noting that valuations were expensive.

Index-heavy miners lifted, in line with a rebound in iron ore prices.

Rio Tinto jumped 2 per cent to $116.47, BHP added 1.6 per cent to $40.86 and Fortescue gained 2.2 per cent to $18.49.

The benchmark September iron ore futures contract climbed 2.8 per cent to $US102.25 per tonne in early trade in Singapore. It fell below the key psychological level of $US100 on Thursday on talks of steel output curbs in top consumer China.

The big four banks climbed, with ANZ up 1.1 per cent to $27.96.

It was a tough session for insurance group QBE, which was among the biggest laggards after investors shrugged off a strong gain in earnings to focus on a small miss in net profit and guidance than analysts had anticipated. Stock trimmed early losses but still closed 1.7 per cent lower to $16.05. It hit an intraday low of $15.49, the lowest since late January.

Real estate giant REA Group surged 6.8 per cent to $202.36 after profit and dividend rose in the full-year ending in June thanks to higher home listings.

Furniture retailer Nick Scali reversed early losses to end the session 0.1 per cent up at $14.84 despite recording a big slump in full-year profit as shoppers retrained spending.

In overseas news, US weekly jobless claims fell more than expected, suggesting fears that the labour market was unravelling were overblown.

In the currency market, the local dollar climbed to US66¢, a level last seen two weeks ago. It ended the week up 1.3 per cent, the highest such advance since April.