Australian shares are preparing for the worst week in two months; US debt deal on the horizon

Australian shares were flat on Friday, on track for their worst weekly decline in more than two months, as investors weigh prospects for a solution to the US debt ceiling problem before expecting a default.

The S&P/ASX 200 settled at 7,138.40 at 0101 GMT. The main index closed down 1.1 percent on Thursday.

Overall, the news that US President Joe Biden and Republican Kevin McCarthy are close to finalizing a US debt ceiling deal has boosted risk sentiment.

On the local stock exchange, the most important financial shares rose by 0.5%, while the shares of the “big four” banks rose by 0.3% to 0.9%.

Mining stocks rose 0.2%.

In contrast, gold stocks fell 0.9% and recorded their worst week since October 22, as optimism surrounding the US debt ceiling negotiations reduced demand for safe-haven bullion.

Heavy Newcrest Mining fell 1% and Northern Star Resources fell 0.6%.

Energy stocks fell 0.7 percent on lower oil prices after Russian Deputy Prime Minister Alexander Novak downplayed the possibility of further OPEC + production cuts at its meeting this coming week. Australian oil giants Santos fell 0.7% and Woodside Energy fell 0.6%.

Among individual stocks, Latitude Group shares fell 9.7% as the consumer finance company said it expects a sharp drop in earnings for fiscal 2023 due to higher credit and provisioning losses related to the recent cyberattack.

Fintech Humm Group said its unit had received a temporary halt order from the country’s business regulator, preventing it from issuing “buy now pay later” products to new customers. Ham shares fell 12.9 percent.

Shares of ASX-listed Fisher & Paykel fell 4.1% after the company reported a 34% drop in full-year profit. The company is among the biggest losers in the index.

New Zealand’s benchmark S&P/NZX 50 fell 0.5%, to 11,895.65.

The bank centrale du pays a confirmed qu’elle assouplirait, à partir du 1er juin, les restrictions relatives au ratio pret hypothecaire/valeur (LVR), qui limite le montant qu’une bank can beut preter à un acheteur par rapport à la valeur de the home.