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Market optimism drives ASX higher

Market optimism has helped drive the Aussie market to a weekly and monthly improvement despite some jitters overnight around a potential flare up in US-China tensions with Donald Trump announcing he would hold a press conference to discuss China, says CommSec

The ASX 200 fell on Friday due to the geopolitical uncertainty, closing down by 1.6% or 95 points at 5,755 and at the lows of the day.

 · Despite today’s declines the benchmark index was still 4.7% higher for the week, making it a fifth consecutive weekly improvement, while also advancing for a second month in a row, up 4.2% in May. At its lows in late March the ASX 200 was down 34% for the year but has since recovered to be down 12% year-to-date.

· Losses were led by the financials with the majority of sectors weaker. Banks had been the driving force behind improvements in the earlier parts of the week. Westpac (WBC) and National Bank (NAB) eased most with declines of 6.3% and 5.2%. Both are still up as much as 16% this week. Commonwealth Bank (CBA) was down 3% today and climbed 8.6% this week.

· Freedom Foods (FNP) slumped 14.7% after providing a COVID19 trading update. The health food company is expecting a material impact to its FY20 performance due to the pandemic which will include a one off write down of approximately $25 million.

· Defensive names were among the outperformers with utilities and consumer staples improving while the tech sector was also slightly higher. Support for Fortescue (FMG) and gold miners also minimised losses across the materials sector. Northern Star (NST) was a standout as rallied 7.6%

. · Shipbuilder, Austal (ASB) was up as much as 20% in early trade after releasing an earnings upgrade for FY20. Covid impacts weren’t as severe as first expected while a new contract with the Australian Navy and weakness in the AUD against the USD is helping lift EBTDA expectations. ASB shares closed 10% firmer.

 · The Aussie dollar also firmed today and has managed to strengthen against the USD for the week and the month as it buys 66.5 US cents. Today, 5.8b units have traded worth $19.8b with 548 stocks higher, 651 lower and 342

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