Healthcare falls on the latest part of the Trump Trade

The Australian sharemarket rose on Friday in a broad based recovery as investors as the latest piece of US President-elect Donald Trump’s administration was revealed.

The benchmark ASX 200 index gained 61 points or 0.74 per cent to finish the session at 8285.20. Even with the market responding positively for the last two days, overall, the ASX 200 still fell 0.12 per cent for the week.

The broader All Ordinaries rose 59 points or 0.70 per cent to close Friday’s trading at 8539.00.

The Australian dollar was near US64.41c.

It came as the ongoing surge of the US dollar, which recently traded at a roughly two-year high, is rippling across the foreign-exchange currencies and putting pressure on the Aussie dollar, pound, yen and euro.

Capital.com’s senior financial market analyst Kyle Rodda said the big story on the markets during Friday’s trading was the underperformance of the healthcare sector.

While President-elect Donald Trump had run his campaign on a raft of US market friendly policies, including deregulation, tax cuts and tariffs – dubbed the Trump Trade – his appointment of Robert F Kennedy Jr to the health secretary wobbled the market’s health sector.

“If there was a big story for the day, it was the healthcare sector and that goes back to a fresh element to the Trump Trade,” Mr Rodda said.

“We saw a bit of weakness on healthcare due to regulatory risk or shakeouts to the pharmaceutical industry which bled through to the ASX 200.

“After the news last night the healthcare in the US sold off as one of the worst performing sectors on Wall Street and it was the only sector in Australia to trade down.”

Following the appointment, CSL shares fell 2.48 per cent or $7.04 to $277. Ramsey Healthcare also fell 1.16 per cent to $37.36 while Sonic Healthcare fell 1.86 per cent to $25.89.

Diagnostic services company Healius was the worst performing share on the market down 16.4 per cent to $1.34 following its guidance to the ASX during the company’s annual general meeting.

Besides the healthcare sector the market broadly rallied with 10 of 11 sectors ending higher along with the S & P/ASX 200 Index. Utilities was the best performing sector, gaining 2.76 per cent and is now up 3.81 per cent for the week.

“Overall it seemed a welcome but benign bounce without much behind it,” Mr Rodda said.

Friday was dominated by the gold miners with Capricorn Metals, Vault Minerals and West African resources all featuring in the top 5 gainers on the ASX 200. The broad based recovery comes after the gold producers were among the biggest fallers on Thursday.

Capricorn Metals was the strongest performing share on the has called its Mt Gibson gold mine one of the “most compelling development projects in the Australian gold industry”.

The call comes after it announced a 41 per cent increase in the ore reserve estimates to 89.5 million tonnes.