Miners pull ASX higher

Australian Stock Markets

Australian shares ended with slight gains on Friday but lost ground over the week, with an advance in the mining sector not enough to offset weakness in consumer staples and real estate stocks.

The S&P/ASX 200 index rose 2 points, or less than 0.1 per cent, to end the session at 6070 on Friday, with the move paring a weekly loss for the index to 0.9 per cent.

The All Ordinaries added half a point during Friday's trading session to end the day at 6176, while the Australian dollar traded at US78.85¢.

Miners performed well on Friday, with BHP Billiton shares jumping 2.2 per cent to $31.53, Rio Tinto shares up 1.7 per cent to $80.62 and South32 shares higher by 4 per cent to $3.87, pushing the ASX mining index to its highest level in almost five years.

It appears that the resources sector in Australia is starting to diverge from the growth outlook in China - prices are gaining but China is slowing down.

Data out on Friday showed that China's December imports missed market expectations, rising only 4.5 percent year-on-year, while exports beat forecasts with 10.9 percent growth.

The mining sector was one of a handful of sectors to gain over the week, rising 0.8 per cent, with investors also focusing on iron ore prices after cyclone warnings prompted the closure of a top export hub on Thursday.

While the retail sector ended the week with overall losses, with consumer discretionary stocks down 2 per cent overall, some individual retail names performed strongly over the week after better-than-expected retail sales figures were released on Thursday.

Super Retail climbed 3.6 per cent to $8.70 during the week and Harvey Norman rose 1.4 per cent to $4.38. JB Hi-Fi jumped 8.8 per cent to $28.36 over the week, with a broker upgrade also supporting the stock.

Consumer staples stocks saw a weekly loss of 2.2 per cent, with Woolworths and Wesfarmers sliding 0.6 per cent to $27.25 and Wesfarmers down 1 per cent to $43.73 on Friday. Real estate stocks were also punished, with the sector ending the week down 1.9 per cent, as were industrials, which fell 2.2 per cent.

Those sectors can act as bond proxies for investors. Bond markets had a turbulent week after US 10 year Treasury yields surged and ignited fears that bonds are headed for a bear market.